The important lesson of XX century is that discredited economic and political ideas, no matter how
absurd, don't die as long as they serve well power that be. In a way they are real living
dead, sucking blood from humans. Those ideas that should have died long ago, still shamble forward.
Usage of such ideas is one of the most dangerous deception schemes practiced by modern elites

It's not easy to write about pseudo science. The problem has to do with the fluid nature of the concept.
It has no single, precise meaning and there is little agreement about its constituent elements. But
first and foremost it involved subjugation of scientific aims to political goals and deliberate attempt
in deception and subsequent cover up. But recently almost all social and economic science became political
and all politics involved deception: to say that a politician is not lying is the same as to say that
an alcoholic is not drinking. Still there are different degrees of lies and different level of density
of the "cloud of deception".

Discredited ideas with political support are often called "Zombies". Lysenkoism probably represents
classic early example when an set of obvious lies was supported by repressive apparatus of state. What
we saw it as a tragedy in Stalin's Russia genetics, we now see it as a farce in USA economics with neo-classical
economics flourishing with the supportive guidance of neoliberal state and financial oligarchy.

The whole neoclassical economics is essentially a set of zombie ideas which are kept in the forefront
by financial oligarchy. The financial crisis of 2008 biried key ideas of 'free market liberalism'
(aka neoliberalism), such as the 'Efficient Markets Hypothesis', yet these zombie ideas still were dug
our, dressed and continue to be sold via major newspapers and journals. Much like Lysenkoism in the
USSR by CPSU. See

This is a real Faustian bargain for academic scholars. One can trade the independence for political
influence, good salary and other perks. It is also helps in the power grab. And despite popular image
of scientists, they proved to be as corruptible, if not more corruptible, as anybody else. Historically
the scientific community is generally held together and all its affairs are peacefully managed through
its joint acceptance of the same fundamental scientific beliefs. Science is best practiced in a voluntary,
peaceful and free atmosphere.

But that idyllic arrangement firmly belongs to the past. Now we can talk only about the level
of political pressure on scientists via research grants, not so much about presence or absence of such
a pressure. What really matters as far as politics and science is concerned is what type of environment
the individual scientists have to work in and what degree of freedom they can enjoy.

Historically the situation changed irrevocably since early XX contrary, which signified discovery
of atomic particles. It should be understood that the modern scientist, built in the modern "neoliberal"
democracies, is at the same time - and it is possible that even in the first place - a political agent,
a manipulator. For the unwashed masses a public scientist represent the ultimate carrier of truth for
a given discipline, so his opinion have a distinct political weight. And the architects of these systems
use this values of scientists to the fullest extent possible. Like we can see with neoclassical economics,
scientists have turned into an instrument of cognitive manipulation, when under the guise
of science financial oligarchy promote beneficial to itself a false and simplistic picture of the world,
which brainwash the masses into "correct" thinking.

In this sense one can say that Lysenkoism represented a natural side effect of shrinking of
freedom of the scientific community and growing influence of political power on science. As by Frederick
Seitz noted in his The
Present Danger To Science and Society

Everyone knows that the scientific community faces financial problems at the present time. If
that were its only problem, some form of restructuring and allocation of funds, perhaps along lines
well tested in Europe and modified in characteristic American ways, might provide solutions that
would lead to stability and balance well into the next century. Unfortunately, the situation is
more complex, made so by the fact that the scientific establishment has become the object
of controversy from both outside and inside its special domain. The most important aspects
of the controversy are of a new kind and direct attention away from matters that are sufficiently
urgent to be the focus of a great deal of the community's attention.

The assaults on science from the outside arise from such movements as the ugly form of "political
correctness" that has taken root in important portions of our academic community. There are to be
found, in addition, certain tendencies toward a home-grown variant of the anti-intellectual Lysenkoism
that afflicted science in the Stalinist Soviet Union. So-called fraud cases are being dealt with
in new, bureaucratic ways that cut across the traditional methods of arriving at truth in science.
From inside the scientific community, meanwhile, there are challenges that go far beyond those
that arise from the intense competition for the limited funds that are available to nourish the
country's scientific endeavor.

The critical issue of arriving at a balanced approach to funding for science is being subordinated
to issues made to seem urgent by unhealthy alliances of scientists and bureaucrats. Science
and the integrity of its practitioners are under attack and, increasingly, legislators and bureaucrats
shape the decisions that determine which paths scientific research should take. There is,
in addition, a sinister tendency, especially in environmental affairs, toward considering the undertaking
of expensive projects that are proposed by some scientists to remedy worst-case formulations of
problems before the radical and expensive remedies are proven to be needed. They are viewed
seriously though they are based on the advice of opportunistic alarmists in science who leap ahead
of what is learned from solid research to encourage support for the expensive remedies they perceive
to be necessary. The potential for very great damage to science and society is real.

Of course, the rise of 'Lysenkoism' in the Soviet Union in the late 40th of the twentieth century
is one of the most tragic pages of the history of science. Trofim Lysenko, a Soviet agronomist,
came to prominence as the proponent of a theory of heredity that stood in direct opposition to Mendelianism.
The details of this theory need not concern us, except to note that it was 'Larmarckist' in its contention
that it is possible for organisms to inherit acquired characteristics. This was wrong and the
principles of Mendelianism - the theory of heredity - were well understood by then. But Lysenko theory
fitted nicely with the Soviet ideology. Particularly, the idea that acquired characteristics could be
inherited held out the promise of the perfectibility of mankind which as strange as it may sound was
the necessary precondition to irreversible victory of socialism/communism (later when nationalistic
forces tore apart the USSR it became clear that such hopes are completely misplaced).

So the Stalinist state intervened in the pre-exiting scientific struggle by declaring the victor
and the consequences, certainly for many of the scientists involved and arguably also for the USSR agriculture,
were disastrous. The essence of Lysenkoism is that pseudo-scientific theory became a pseudo-religious
cult and the power of state was used to suppress dissidents. Many scientists were exiled; some killed.
Unfortunately we cannot dismiss the obviously pernicious use of ideology by Lysenko and his supporters
simply as an aberration of the era that is often brushed aside as 'the cult of personality' (with or
without naming the personality in question). This proved to be much more dangerous and at the same time
remarkably resilient phenomenon that survived the dissolution of the USSR. Actually the situation repeated
with the USA economics when anything that was not neo-classic was suppressed was by-and-large similar
although this time this time it happened without any killings.

Do not fool yourself that Lysenkoism is irrevocably connected with communist ideology. The link was
poorly accidental. In reality Lysenkoism emerged more like a cult which was extremely convenient for
the control freaks in high position in government. It's not a secret that a lot of high-level administrators
in academic institutions belong to the category of
micromanagers
and as such they are naturally predisposed to Lysenkoism.

In general "Lysenkovisation of science" occurs when the state tries to control both the methodologies
and goals of scientific activity and that happens all over the world, although to different degree.

In the USSR huge bureaucratic institutions such as VASKhNIL and VIEM had been set up with the specific
goal to control resources and, especially, scientific press. Part of the reason that Lysenkoism
gained official support in the Soviet Union was because the Mendelian approach to genetics contradicted
official ideology, in particular, Engels's dialectical materialism. In early 50th, just before his death
Stalin began to sense that Lysenkoism can hinder practical science by interfering with the academic
atmosphere of toleration of dissent most conducive to scientific accomplishment. He even went as far
as to declare that

“no science can develop and proper without the clash of opinions, without freedom of criticism.”

But it was too late...

Other governments are also far from being immune from this kind of tendency to select between scientific
theories on the basis of ideology rather than the balance of evidence.

More benign variant of Lysenkoism that does not rely on the power of the state is usually called
Cargo Cult Science. Another related term is
"Mayberry
Machiavellis". A long time ago -- well, actually it was just a year, but it seems like a
lot longer than that -- a former Bush advisor John DiIulio got into quite a bit of trouble for revealing
to Esquire that the White House did not possess, in any conventional definition of the term,
a
policy-making process:

...on social policy and related issues, the lack of even basic policy knowledge, and the only
casual interest in knowing more, was somewhat breathtaking—discussions by fairly senior people who
meant Medicaid but were talking Medicare; near-instant shifts from discussing any actual policy
pros and cons to discussing political communications, media strategy, et cetera. Even quite junior
staff would sometimes hear quite senior staff pooh-pooh any need to dig deeper for pertinent information
on a given issue...

This gave rise to what you might call Mayberry Machiavellis—staff, senior and junior, who consistently
talked and acted as if the height of political sophistication consisted in reducing every
issue to its simplest, black-and-white terms for public consumption, then steering legislative initiatives
or policy proposals as far right as possible.

Dan Gardner - Senior Writer for The Ottawa Citizen writes: "Cabinet meetings were scripted, Mr. O'Neill
discovered, by White House staffers who sent advance notes to cabinet secretaries telling them when
they were 'supposed to speak, about what, and for how long.'" Is this the shadow of Politburo or what?

The Financial Crisis and the Systemic Failure of Academic Economics, by David Colander, Hans Föllmer,
Armin Haas, Michael Goldberg, Katarina Juselius, Alan Kirman, and Thomas Lux: [From the conclusion]
..."We believe that economics has been trapped in a sub-optimal equilibrium in which much of its
research efforts are not directed towards the most prevalent needs of society. Paradoxically
self-reinforcing feedback effects within the profession may have led to the dominance of a paradigm
that has no solid methodological basis and whose empirical performance is, to say the least, modest.
Defining away the most prevalent economic problems of modern economies and failing to communicate
the limitations and assumptions of its popular models, the economics profession bears some responsibility
for the current crisis. It has failed in its duty to society to provide as much insight as possible
into the workings of the economy and in providing warnings about the tools it created. It has also
been reluctant to emphasize the limitations of its analysis. We believe that the failure to even
envisage the current problems of the worldwide financial system and the inability of standard macro
and finance models to provide any insight into ongoing events make a strong case for a major reorientation
in these areas and a reconsideration of their basic premises."

While at the surface it looks like rent-seeking behavior of dishonest economists the analogy is pretty
strong. A broad critique of Neoclassical economics has been put forward in the book Debunking Economics
by Steve Keen See, for example:

"He who dictates and formulates the words and phrases we use, he who is master of the press and radio,
is master of the mind. Repeat mechanically your assumptions and suggestions, diminish the opportunity
for communicating dissent and opposition. This is the formula for political conditioning of the masses.

The big lie and monotonously repeated nonsense have more emotional appeal in a cold war than
logic and reason.

The continual intrusion into our minds of the hammering noises of arguments and propaganda
can lead to two kinds of reactions. It may lead to apathy and indifference, the I-dont-care
reaction, or to a more intensified desire to study and to understand. Unfortunately, the first
reaction is the more popular one. Confusing a targeted audience is one of the necessary ingredients
for effective mind control."

Joost Meerloo, The Rape of the Mind

There is going to be another financial crisis within the next two years, and it will be global,
and it may be much more consequential than the other two or three we have seen since the Fed embarked
on this course of its long and checkered career.

It is also avoidable, and in their quiet, private moments the really good economists can see
it coming. Why don't they say anything? Ennui of the bureaucrat, entropy of an inability
to change, and the credibility trap of failed ideologies in a failing empire.

They did not get to where they are by 'rocking the boat.' And so they will be quiet,
unless they see some advantage in it for them, most ordinarily in a pay for say.

Not so for the financiers and their minions. They will not be quiet, alas. The
more badly they behave, the louder they seem to become.

They are short term, and almost infantile in the self-centered reasoning. Although a
child is limited by lack of faculty and experience, the speculator is hampered by vanity, a self-imposed
lack of human development, and an almost obsessive preoccupation with drinking, favorite objects, and
teats.

They see something and they want it, they know only what they can feel in the desire of the
moment, morally they are undeveloped, and when they make a mess they cry loudly, until an adult comes
to clean it up for them. But unlike a child they have no gratitude, no sense of their own dependency,
or natural affection for others.

Logic. I began with a look at the history of logic. The ancient Greek philosophers
known as Sophists would argue for or against any case for money. Socrates questioned whether
people really understood what they were saying, by asking them to define what they meant by a
particular concept and then showing that their assumptions led to unwelcome conclusions.
Aristotle was the first to develop definite principles of logic. They depend on words having
definite meanings.

One of the great achievements of the ancient Greeks was Euclid's Elements which
synthesised the geometrical knowledge of the time by stating clear initial assumptions and
deducing complex geometrical theorems by simple logical steps. This was an important advance in
science. Archimedes to some extent added the further element of experiment, needed for
scientific progress, in his engineering work. This however, with power shifting to the Romans
who were not theoretically minded, and with the rise of Christian and Islamic religion, was not
followed up until the Renaissance some 1500 years later.

The scientific revolution associated with such figures as Copernicus, Kepler, Galileo,
Descartes and Newton depended on Aristotelian logic and Euclidean geometry, enhanced by new
mathematical methods, like coordinates and calculus and was very sucessful in physics.

Dialectic. However, there were problems applying the same methods to people and
society. Philosophers such as Fichter and Hegel, working around 1800, developed a new scheme of
logic known as Dialectic for this purpose. Dialectic is supposed to proceed by a process
of analysis into thesis and antithesis leading to synthesis. This way of thinking was
influential on Marx, Engels and others.

In the twentieth century something seems to have gone wrong with the dialectic approach.
Philosophers lost sight of the pursuit of truth. Perhaps it is inherent in the idea of dialectic
itself.

Public Relations and Propaganda. The first world war saw the development of PR and
propaganda. Woodrow Wilson who had promised not to get the US involved in the war was forced to
change his mind, and set up a panel (the Creel Committee) involving journalists Walter Lippmann
and Ivy Lee, to explain this turn-abount to the electorate. These people developed the ideas of
Public Relations. Edward Bernays, a nephew of Sigmund Freud, wrote two influential books The
Engineering of Consent which sought to use insights from psychology and sociology to
manipulate public opinion, and Propaganda which saw the conscious manipulation of
information as an important element in government. Needless to say this was a significant
influence on Joseph Goebbels, among many others. National Socialism (ostensibly left-wing) was
also fascism (right-wing). George Orwell's 'Newspeak' in his novel 1984 satirised the
soviet communist propaganda methods of Stalin.

Postmodernism. Based on the German philosophers Friedrich Nietsche (1844 - 1900), Max
Weber (1864 - 1920) and Martin Heidegger (1889 - 1970), postmodernism and other related isms
such as Social Constructivism, were developed mainly by a series of French writers: Paul Ricoeur
(1913 - ), Roland Barthes (1913 - 1980), Jean-Francois Lyotard (1924 - 1998), Jean Baudrillard
(1929 - ) and Jacques Derrida (1930 - 2004). They raised the supposed difficulty of finding a
'privileged position' from which the 'real meaning' of a text or culture can be discovered.
Social constructivism holds that truth is constructed by social processes, and is in part shaped
by the power struggles within a community. It is believed that concepts like race, sexuality and
gender are socially constructed.

Jacques Derrida (1930 - 2004) is associated with the idea of deconstruction. When
asked to define it he stated (1983): "I have no simple and formalisable response to this
question. All my essays are attempts to have it out with this formidable question". The
University of Cambridge (1992) awarded Derrida an honorary doctorate, despite opposition from
members of its philosophy faculty and a letter of protest signed by 18 professors from other
institutions. They claimed Derrida's work "does not meet accepted standards of clarity and
rigour" and described it as being composed of "tricks and gimmicks similar to those of the
Dadaists". He tries to give an appearance of profundity by making claims that seem paradoxical (Searl
1994).

The Sokal Hoax. In 1996 Alan Sokal, professor of physics at New York University,
submitted a paper to the postmodern cultural studies journal Social Text published by
Duke University. It's title was "Transgressing the Boundaries: Towards a Transformative
Hermeneutics of Quantum Gravity". On the day of publication Sokal announced in another magazine
that the article was a hoax, calling his paper "a pastiche of left-wing cant, fawning
references, grandiose quotations, and outright nonsense" which was "structured around the
silliest quotations I could find about mathematics and physics" made by humanities academics.
This publication won the journal the 1996 IgNobel Prize for literature.

Alan Sokal and Jean Bricmont subsequently (1998) published a book on Intellectual
Impostures. It was memorably reviewed by Richard Dawkins (reprinted in A Devil's Chaplain).
In that he wrote (p.147): "You can buy any number of books on 'quantum healing', not to mention
quantum psychology, quantum responsibility, quantum morality, quantum aesthetics, quantum
immortality and quantum theology. I heven't found a book on quantum feminism, quantum financial
management or Afro-quantum theory, but give it time." Lo and behold! Carolyn G. Guertin, Senior
McLuhan Fellow, University of Toronto, duly obliged with "Quantum Feminist Mnemotechnics: The
Archival Text, Digital Narrative and the Limits of Memory". Another book attacking postmodernism
is Why Truth Matters by Ophelia Benson and Jeremy Stangroom.

The Postmodernism Generator. Sokal noted that, in addition to numerous half-truths,
falsehoods and non sequiturs, his original article contained some "syntactically correct
sentences that have no meaning whatsoever". He regretted not having the knack of writing more of
these. Thanks to Andrew C. Bulhak who programmed a postmodernism generator he could now
use a computer to generate such sentences at will. Every time you visit the site it will
generate for you a new postmodern discourse.

Enemies of Truth. Another current practitioner of postmodernism is Steve Fuller,
Professor of Social Science at Warwick University, who has used it to support claims of
'intelligent design' to be scientific. Alan Munslow says "The past is not discovered or found.
It is created and represented by the historian as text". Keith Jenkins believes that "history is
just ideology". Hans Kellner complains that historians "routinely behave as though their
researches were into the past. ... The past is unknowable; all we can know about is historians'
writings". Of course it is right to say that we can never know the whole truth about anything in
the past, but it does not follow that there is no such thing as the truth at all.

There's one thing not happening today which should be. People are not ridiculing Nick Clegg,
at least no more so than usual. But they should be, because one part at least of his
speech yesterday was downright stupid:

Who suffers most when governments go bust? When they can no longer pay salaries, benefits
and pensions? Not the bankers and the hedge fund managers, that's for sure. No, it would be
the poor...

Of course, this is plain wrong. In countries with their own central banks, governments cannot
go bust because the central bank can simply print money to buy government debt: this is what QE
is. Of course, this might or might not be a bad idea. But Clegg didn't argue this. He just made
a prat of himself.

However, my point is not to condemn Clegg; I'll not flog that dead horse. Instead, it's to note
that the MSM seem to have ignored this. His speech was reported with the usual post-conference
bromides rather than along the
lines of "Deputy Prime Minister shows himself to be crass idiot."

There are two things going on here.

First, the Overton window has
shifted so far away from rational policy discussion that blatant falsehoods not only do not
provoke the derision they deserve, but actually go unchallenged.

Secondly, this is another example of
fact-free politics. Despite Edward Docx's
obituary last year, postmodernism is alive and well.

Which brings me to what's really troubling about Clegg's remark.Docx claims that postmodernism
was a good thing because:

Once you are in the business of challenging the dominant discourse, you are also in the business
of giving hitherto marginalised and subordinate groups their voice.

The fact that Clegg can get away with errant nonsense challenges this optimism. In a postmodern
world in which all all discourses are equally valid regardless of their truth-value, the claims
of the ruling class are not exposed for the lies and imbecilities they are. Postmodernism as it
actually exists - that is, with a supine media - thus helps to serve a reactionary function.

But my impression is that "fact free" politics is really a cover for an unwillingness to
discuss the available facts, because they are unpleasant, as they relate to nasty self interest
and distributional issues.

People aren't interested in looking at medians and graphs. We have a duty to try and broaden
that message outside of the think tank zone.

I don't know what to make of this. It could be that Skidmore is recommending that politicians
use social science in the way Paul Krugman
urges economists to use
maths - you base your policy upon it, but then find a way of advocating the policy in more populist
language.

This suggests an unkinder interpretation - that Skidmore thinks formal science has no place in
politics. What matters is what sells, not what's right.

The problem here is that there is no strong obstacle to this descent into post-modern politics.
The anti-scientific
culture of our mainstream
media means they will not call politicians out on their abuse of facts, unless the abuser is
not in their tribe - as Jonathan complained in noting the press's reaction to Britannia Unchained.

But does this matter? In one sense, maybe not. Expert
support and empirical
evidence does not guarantee that a policy will be a success - though I suspect it improves the
odds.

Instead, what worries me is that this threatens to further corrode the standard of political
discourse. Fact-free politics need not be the sole preserve of the right; some of my readers will
have the name of Richard Murphy in their minds. And if we go down this road, we'll end up with one
tribe thinking the poor are all scroungers and the other thinking our economic problem can be solved
by a crackdown on tax dodging. And the two tribes will just be throwing insults at each other. And
there's a few of us who think this would be dull.

I don't think that's what Skidmore's saying but nor do I think that what he's saying is any
less silly. He replies to charges of slipshod research and laziness by saying...
"...it's a 116-page book, there's 433 footnotes to it."

I see this a lot: the implicit claim that the merit of work can be judged by the amount of
references that it contains. Yet that says nothing about the quality of its research or interpretation.
I could argue that I'm God and add 433 footnotes that reference self-published blogposts in
which I proclaim that I'm a deity but it wouldn't make it a work of scholarship.

Chris | September 22, 2012 at 10:05 PM

"Fact-free politics need not be the sole preserve of the right"
They need not be, but they are.

Blissex | September 23, 2012 at 12:47 PM

Continuing my previous comment on voter hypocrisy, yes there are many voters who consider
politics a spectator sport, a source of entertainment, just like news.

But my impression is that "fact free" politics is really a cover for an unwillingness to
discuss the available facts, because they are unpleasant, as they relate to nasty self interest
and distributional issues.

Politics thus may be fact free because the facts cannot be be discussed in a politically
correct way, and therefore dog whistling abounds.

It is not a question of tribes, but of interests, even if these interests relate fairly directly
to culture and in particular theology (most "culture" is the corrupted legacy of some dead theologian).

"When I was at university, a one-time very senior Tory figure put it succinctly at an off-the-record
gathering: the Conservative Party, he explained, was a "coalition of privileged interests.
Its main purpose is to defend that privilege. And the way it wins elections is by giving just
enough to just enough other people"."

Sam | September 24, 2012 at 05:31 PM

But my impression is that "fact free" politics is really a cover for an unwillingness
to discuss the available facts, because they are unpleasant, as they relate to nasty self interest
and distributional issues.

Perhaps. It could also be that looking at the facts will force you to realize that your simplistic
1D-model of how things work doesn't actually fit the available data.

Milton Friedman lived till 2006 and was intellectually active till then, writing an essay
for the Wall Street Journal advising the privatizing of the New Orleans schools in the wake
of Hurricane Katrina in 2005. A typical application of "shock doctrine" policy for New Orleans.

I know of no instance in which Milton Friedman criticized conservative economic thinking from
the 1980s to 2000s, and would be interested to learn of any instance.

One of those who saw opportunity in the floodwaters of New Orleans was the late Milton Friedman,
grand guru of unfettered capitalism and credited with writing the rulebook for the contemporary,
hyper-mobile global economy. Ninety-three years old and in failing health, "Uncle Miltie", as
he was known to his followers, found the strength to write an op-ed for the Wall Street Journal
three months after the levees broke. "Most New Orleans schools are in ruins," Friedman observed,
"as are the homes of the children who have attended them. The children are now scattered all
over the country. This is a tragedy. It is also an opportunity."

Friedman's radical idea was that instead of spending a portion of the billions of dollars in
reconstruction money on rebuilding and improving New Orleans' existing public school system,
the government should provide families with vouchers, which they could spend at private institutions.

In sharp contrast to the glacial pace with which the levees were repaired and the electricity
grid brought back online, the auctioning-off of New Orleans' school system took place with military
speed and precision. Within 19 months, with most of the city's poor residents still in exile,
New Orleans' public school system had been almost completely replaced by privately run charter
schools....

Privatising the school system of a mid-size American city may seem a modest preoccupation for
the man hailed as the most influential economist of the past half century. Yet his determination
to exploit the crisis in New Orleans to advance a fundamentalist version of capitalism was also
an oddly fitting farewell. For more than three decades, Friedman and his powerful followers
had been perfecting this very strategy: waiting for a major crisis, then selling off pieces
of the state to private players while citizens were still reeling from the shock.

In one of his most influential essays, Friedman articulated contemporary capitalism's core tactical
nostrum, what I have come to understand as "the shock doctrine". He observed that "only a crisis
- actual or perceived - produces real change". When that crisis occurs, the actions taken depend
on the ideas that are lying around. Some people stockpile canned goods and water in preparation
for major disasters; Friedmanites stockpile free-market ideas. And once a crisis has struck,
the University of Chicago professor was convinced that it was crucial to act swiftly, to impose
rapid and irreversible change before the crisis-racked society slipped back into the "tyranny
of the status quo". A variation on Machiavelli's advice that "injuries" should be inflicted
"all at once", this is one of Friedman's most lasting legacies....

Compared to Milton Friedman, Arthur Laffer and Stephen Moore are employees of Bernie Madoff selling
a free lunch ponzie scheme that keeps drawing paying customers. Laffer and Moore take no risk
in selling therapuetic economics to the believers of tax cut magic. The believers take no risk because
the losses are shifted from them to the public. Laffer and Moore never go to jail because their bosses
never goes to jail as the ponzie scheme rolls on. Even Milton Friedman would out them as voodoo tax
fraud criminals.

I never got around to commenting on the infamous Economist
list of influential economists; they've been given plenty of deserved grief, to which I needn't
add. But I think I might have something useful to say about a fact that is really unmistakable when
you look at a list
corrected
by removing central bankers, or make a more
subjective judgment: these days, the economist as public intellectual is overwhelmingly likely
to be a liberal.

As
Noah Smith
says, it was not always thus. He argues that the field of economics has changed, with greater emphasis
on market failures, and there's arguably something to that. I'd also argue that the descent of right-leaning
macroeconomics into hermetic absurdity matters quite a lot, because macro looms larger in the public
sphere than it does within the academy.

But there's another important factor. Modern conservatism
doesn't have Friedman-like figures — people who would be prominent economists thanks to their research
whatever their politics, who are also public intellectuals– because it doesn't want them. The movement
prefers hacks, who needn't be even minimally competent but can be counted on to defend the party
line without any risk of taking an independent stand.

Let me offer my own two short subjective lists.
I think if you were going to name the two current econoheroes of U.S. liberals they would probably
be Joe Stiglitz and yours truly. (Thomas Piketty has made a huge and well-deserved splash, but so
far only on one issue.) The thing that is obvious about Joe is that before becoming a public figure
with a political following he established his reputation with vast amounts of widely cited academic
research; you can get a sense of what he did by looking at his
top entries on Google Scholar. And
here are mine.

Now, who would be the conservative counterparts?
Who gets cited by, say, Republican governors seeking authority for their tax cuts, or published
on a regular basis on conservative opinion pages? I'd say Stephen Moore and Arthur Laffer. No point
in looking them up on Google Scholar, although Laffer does show up, marginally, for a 1971 paper
co-authored with Eugene Fama.

And it's not as if Moore and Laffer are guys who
may lack academic cred but have proved themselves as working analysts. On the contrary, they're
guys who can't even cook numbers without
screwing up, who have spent years telling us to
get ready for soaring interest and inflation rates. But it doesn't matter; being right is not
what they're paid for.

So in trying to understand where the Milton Friedmans
of yore have gone, you want to look at the demand side. The right lacks heavyweight economists with
independent reputations partly because they are hard to find, but also because it doesn't want them.
Only hacks need apply.

Mark Thomason, Clawson, MI

"Modern conservatism doesn't have Friedman-like
figures — people who would be prominent economists thanks to their research whatever their politics,
who are also public intellectuals– because it doesn't want them. The movement prefers hacks,
who needn't be even minimally competent but can be counted on to defend the party line"

That is very true.

It is true in more than just economics. We have people commenting on nuclear arms and war who
have no qualifications except that they will say what conservatives want to hear. They want
wars. The make stuff up to get wars. They did in Iraq, and they are still doing it.

Our own economic future would be much improved if we find an answer to this behavior. That future
would be much improved by reduction of war and rumors of war if we did the same in other fields.

The conservative worship of ignorance and conformity is doing a vast amount of harm in all fields.
It is triumphant just now. It is tearing down what has been best of America for Americans.

Steve Bolger, New York City 8 hours

Someday there may be a Nobel Prize for the
economist who can explain why the Federal Reserve Bank cannot fulfill a dual mandate to maintain
a constant currency value and full employment at the same time with monetary policy alone, but
apparently the whole idea is unmentionable now, as was Alfred Wegener's theory of continental
drift in geophysics back in the 1950s.

LG Phillips, California 9

These very different descriptions of "reality"
coming from a well known liberal and a well known conservative may correspondingly apply to
understanding the difference between liberal and conservative economists:

"Reality has a liberal bias." - Stephen Colbert

"[T]he reality-based community..believe that solutions emerge from your judicious study of discernible
reality. That's not the way the world really works anymore. We're an empire now, and when
we act, we create our own reality. " - Karl Rove

The friedmanites need to go the way of the
community it's when it comes to discoveries. MMT will allow us; in my and others beliefs too.

We can aim much closer to full employment than currently simply by using the money making qualities
of sovereign fiat countries i.e. those that print their own notes and keep debts in that currency
as much as possible! Including private debts keep them in your own currency as much as possible.

Combine that with inflation control, appropriate independence from the government of the day
to override the fundamental principals: a mission in itself I imagine.

QED We wont need austerity ever again!

Oh and we could then invest in science and education again and actually help each other. That's
also a hard part I admit but if we can empower the international institutions that bush II prostituted
to the monied elites in the 1%'s. Anyways I digress...

Also bill Mitchell's blog for more theory:
http://bilbo.economicoutlook.net/blog/

If you are down under then please support the Australian progressives for fact based and science
respecting government policy.

Jerry Hough, Durham, NC

Actually, the leading liberal public economist
is Joseph Stigllitz. The leading conservative economist is Paul Krugman, with the even more
conservative Larry Summers is a close second.

Krugman is a strong partisan of the Obama Administration and it is totally dominated by Wall
Street, mainly Citigroup and Robert Rubin. The Sect of Treasury Jack Law was in charge of the
riskiest (alternative) investments at Citi in the crash.The de facto head of the Fed, first
dep chair Stanley Fischer, was a VP of Citigroup. The head of the National Economic Council
(Summers old job) is Jeffrey Zients. a top investment banker who came out of Bain. The Undersect
of Treasury for Foreign Economic Policy is Nathans Sheets, previously Global Head of Foreign
Economics at Citi. The nominee for Undersect for Domestic Policy is opposed by Elizabeth Warren
because of a similar background. The Chair of the Council of Economic Advisers is Jason Furman,
long close to Rubin.

There are differences within the group.Fischer and Rubin are worry about a stock bubble while
Krugman prefers a continuation of zero rates to keep the market going. Many do not want higher
taxes on the top .1 of 1%, but even Krugman never proposes a concrete tax on, e.g., hedge fund
operators.

Krugman is a respectable conservative, unlike the crazies, but basically he represents the economic
interests of the NY Times owners.

Naturally he favors the conservative Hillary over the more liberal Nixon Republican Warren.

joel, oakland

Jerry, please cite PK's "favoring" Hillary
over Warren. I don't recall reading anything about it. Yes, he favored Hillary over what he
perceived as a conservative Obama, back in 07-08. Your decades of Kremlin watching, assuming
that everything that mattered was said between the lines, appears to make you think that PK
must be similarly scrutinized to understand his agenda.

His agenda seems pretty clear to me: the country's
so deeply polarized, that until one side or the other knocks the other one out for the count,
not much other than posturing will get done; meanwhile the plutocrats (who thrive on the polarization)
continue to keep a firm grip on the levers of power. Like you, however, he's also a contrarian
of sorts, and he didn't go with crowd to crown Obama the king of liberalism, nor has he gone
along with the notion that Obama has no interest in any progressive agenda items. Too bad the
Dems didn't follow his lead last election.

My reading is that he doesn't bother much with policy details in the US because political gridlock
is here for the foreseeable future, so why waste column inches?

As for low fed interest rates, their main beneficial effect has been to keep at bay the powers
that want to raise rates, so that the ultra wealthy can better live on the interest on their
interest, while the higher rates on mortgages, car loans, home equity loans, etc send us back
into recession, lower wages, and further reduced demand, as per Europe. That's a fight going
on now.

Thomas M. Cole JD, Montecito CA

Well said. The financial class funds economists
that agree with them. Here in agreement is PK urging debt as prosperity.

j.l, overseas

I agree with the comments on right wing economists
making money.

Liberal thinking sees the movement of money as to the public good, which then requires highly
educated specialists when dealing with huge market economies. Hence liberal economists.

Conservatives see the economy for personal
gain, so all of their geniuses aren't writing papers to prove their integrity and worth. They
are making money.

A good liberal economist, of course, could
point out how the making of money by a few damages the public good, which is how I profit by
reading Krugman's columns. Thank you, Mr. Krugman.

Steve Bolger, New York City

There evidently isn't much academic demand
for economists who advocate limiting wealth concentration, probably because most university
endowments are funded from concentrated wealth.

David, San Francisco, Calif.

Barry Goldwater conservatives embraced Milton
Friedman economists because both wanted to lead the nation to a better place for the greater
good of the country.

They were men of integrity. I didn't usually agree with them but I respected their views. On
occasion they informed my views. On occasion they embraced the views I held.

Today's conservative movement is an unholy alliance of for-profit religious fervor and a movement
to protect the monied interests for the benefit of the few.

Barry Goldwater foresaw the decline of the Republican party in his lifetime:

"When you say "radical right" today, I think of these moneymaking ventures by fellows like Pat
Robertson and others who are trying to take the Republican party and make a religious organization
out of it. If that ever happens, kiss politics goodbye. -Barry Goldwater

It is funded by the Koch brothers, who have convinced the poor white uneducated masses in the
South to vote for their religious and racial biases over their family's economic interests.

The Republican party is run by tacticians who don't want a better economic system for the benefit
of the country.

Their masters are few and they are well paid to betray the nation for the oligopoly.

Since you can't fool all the people all the time they focus on suppressing the vote and gerrymandering
what is left with the help of a partisan 5-4 Supreme Court.

They don't want or need true scholars since they don't run campaign on facts to informed voters.

Andrew, Portland

The one issue where conservatives talk about
market failures is with finance, but its always about "government interference" at the macro
level. Turn over a few rocks and you get conservatives extending their populist arguments to
discussions about Wall Street, but in both cases it's just an entré into LaRoucheite cryptofascism.

There's no courage on their side about the
global epidemic of market failures in physical product markets, no courage about market failures
in labor markets, no courage about market failures that degrade democratic sovereignty, nothing.
It's purely a bunch of coded dog whistling to try to maintain solidarity with angry white dudes.
And that demographic eat it up because they refuse to vote their own economic interests. For
99.9 percent of people, voting their own interests might mean that someone they don't like would
get the help they need to fully participate in society.

The fetish for cruelty among the right was
only ever moderated by the backlash against things like Nazism, the Klan, or the right-wing
elements of the governments of people like Stalin. When that fades, they always go back to obsessing
over bringing back cruelty to society.

jmc, Stamford

Your reference to "the fetish for cruelty"
is dead on, but I might argue with "only ever moderated by the backlash" to inject "only ever
moderated by their fear of the backlash against" the various manifestations.

But your point is right - and thoughtful. The conservatives have been for more than a century
little more than reactionaries who sought and seek to turn back the clock on any form of social
or economic progress.

Whether tis TR or FDR, Truman or even Ike, their direction always runs backwards and to the
benefit of the few at the expense of the nation.

As you say, they are obsessed "over bringing back cruelty to society."

mshea29120, Boston, MA

Those folks who only view human activity with
a detached eye on the numbers - those gauges detailing personal profit - don't really have an
interest in whether or not their actions are cruel.

But if encouraging society to fragment into
multiple groups and pitting those groups against each other is such an effective way to turn
a profit, there will always be people enthused about doing just that. And it's easiest to do
when the majority of people are having a hard time surviving.

The idea of "cruel" doesn't really occur to
them.

The idea of "proactive assertion and savvy
strategic positioning" might.

JaaaaayCeeeee, Palo Alto, ca

If hack economists funded by Republicans were
our big problem, Democrats arguing for technocrats would have won since Michael Dukakis. Economists
like Stephen Moore or Art Laffer are just cleverer than Rick Santorum, who told values voters
in 2012, "We will never have the elite smart people on our side, because they believe they should
have the power to tell you what to do."

Much cleverer are Larry Summers, spokesmen
for the best funded pols, and reporters clever enough to find narratives that ignore our most
urgent problems and that ignore evidence (or at least crowd it out). It's not just Republicans
that benefit from buying unlimited free speech, influence, regulators, hacks, and those capable
of ignoring the public's needs when implementing public policy. Your hacks don't explain why
voters matter only during elections.

Your own newspaper claims central banks are
the policy makers responsible for stimulating economies after bubbles collapse, when even the
IMF now admits deficit spending is required. 92% of voters get their information from corporate
news media, which claims wage stagnation and unimproved EPOP are mysteries, that bailouts prevented
another great depression, that globalization and technological progress inevitably and naturally
evolve into fewer jobs at lower pay, and that sincerely held beliefs and ideology explain why
there is no alternative to more austerity and voodoo economics.

GOP hacks might be less clever, but they are
not our biggest problem.

Meredith, NYC

What is the link between 'reporters clever
enough to find narratives that ignore our most urgent problems and that ignore evidence' ---and
the huge profits reaped by US broadcasters from the campaign ad avalanche, worse every cycle,
funded by check writing billionaires donors?

Is this why we see little reference to campaign
finance reform in the Times or certainly not on TV? Though there are groups in various states
pushing it?

Why no coverage of the senate vote against
citizens United months ago?

Why no comparisons to our own past when lower
cost elections weren't swamped by big money, and our lawmakers were freed up to respond to the
majority needs.

And why no reporting on other countries with
free campaign media and tax funded short, cheap elections? In the article on the last French
election of Hollande , 1 line mentioned in passing that all candidates had free TV time mandated.
That may have been the most significant item in the article.

Our reporters don't have to be told -- the pressure to conform stemming from profits does
the job.

Michael O'Neill, Bandon, Oregon

It seems likely the right has no chance of
finding another Milton Friedman simply because it was Rose Friedman (née Director) who really
made the man.

I think it rather rude to call people hacks simply because they are overly proud of their limited
capacity. While yes they have allowed themselves to be thrust forward and are certainly dupes
they are not in fact blunt axes chopping away indiscriminately. They are not the wielders
of less then sharp tools. They are in fact just tools.

The hacks are men like Mike Lee and Paul Ryan
who should have the decency to follow their glib statements that they are "not scientists" with
a like utterance that they are "not economists".

ReaganAnd30YearsOfWrong

Too bad the hacks are winning.

It's not like economic academic research garners a lot or respect outside the closed community
of mainstream economists. That's probably because it's pretty much nothing more than a minor
sub-field of mathematics where equations that have little to do with the reality of the economic
world we live in are manipulated. To keep up appearances, some attempt to add another epicycle
every once in a while so that from the outside looking in it doesn't look so ridiculous. Just
sayin'.

While this dismantling of the New Deal is at one level a perfectly rational act of capitalist self-interest,
the book also illuminates its scarier, conflicted, nihilistic side.

Reveals the intellectual foundations of the conservative movement, May 23, 2009

"Invisible Hands" by Kim Phillips-Fein is an illuminating account of conservatism's rise
from obscurity to become America's predominant ideology during the latter part of 20th century.
Combining impressive scholarly research with profound insights into American culture, politics
and history, Ms. Phillips-Fein's brilliant work reveals the intellectual foundations of the
conservative movement as it has rarely been seen or understood before. The result is a fascinating
and highly accessible book that should appeal to a wide audience of inquisitive readers.

Ms. Phillips-Fein recounts how America once perceived conservatism as a mere representation
of the upper class' narrow self-interests. She recalls how the collapse of the economy during
the Great Depression and its stabilization by the New Deal led to a widely-held consensus that
the capitalist system required an interventionist government to function properly, if at all.
In fact, the author recounts how some of the conservative-flavored political and public relations
projects promoted at that time were rebuffed by a citizenry that was highly skeptical of businesspeople
and valued the role of unions and government in securing their economic lives.

Interestingly, Ms. Phillips-Fein suggests that the presumption of an unassailable Keynesian
worldview led to increasing levels of mathematical abstractionism in many university economics
departments; whereas upstart conservative economists such as Ludwig Von Mises, Friederch Von
Hayek and Milton Friedman could remain committed to an economics that retained a strong socio-political
identity. Ms. Phillips-Fein shares how individuals such as Ayn Rand, William F Buckley and Billy
Graham along with conservative think tanks including the American Enterprise Institute drew
inspiration from the conservative economists and gained attention by defining the New Deal as
a socialist threat to individual freedom. The author profiles the extraordinary carreer of Lem
Boulware who is credited with architecting General Electric's effective and widely influential
strategy of union busting and human resource management. While Ms. Phillips-Fein writes that
the conservative political project remained unfulfilled as the voting public remained committed
to the New Deal on account of its success in ensuring the nation's continued economic expansion
and prosperity, she writes that the 1964 Barry Goldwater campaign enabled an activist conservative
constituency to make significant, long-lasting inroads into the Republican Party.

Ms. Phillips-Fein demonstrates that the convergence of social issues with conservative economics,
along with the growing failures of New Deal liberalism to resolve the intractable economic crises
of the 1970s, eventually led to the political ascendancy of conservatism starting with the election
of Ronald Reagan to the U.S. presidency in 1980. Among the influential persons who shaped events
in this period -- including Arthur Laffer, George Gilder, Joseph Coors, Jack Kemp, Justin Dart,
and many others -- Jesse Helms emerges as a pivotal figure for successfully fusing the rhetoric
of free markets with the politics of racial segregation, thereby winning over large numbers
of southern white voters to the conservative cause. A political realignment was ultimately achieved
by gaining the support of religious organizations such as the Moral Majority who leveraged white
working-class discomfort with public school integration, busing and other cultural issues into
a more generalized hostility against big government. Ms. Phillips-Fein suggests that the Bush
Sr., Clinton and Bush Jr. administrations subsequently affirmed the conservative consensus as
unions found themselves steadily losing influence and with business lobbyists increasingly shaping
the legislative agenda, think tanks defining major issues in the media, and the contributions
of businesspeople valued and esteemed.

Today, as we find ourselves witness to yet another financial collapse of the capitalist system
and evidence of an increasingly post-racial American society marked by the election of Barack
Obama, it might seem that the era of conservative politics is over. But the perspective gained
from Ms. Phillips-Fein's book suggests that conservatives will continue to find audiences to
market their solutions as long as economic self-interest and social anxieties persist; in this
light, to underestimate the appeal of conservative ideas might well be a perilous mistake.

I highly recommend this remarkably insightful, informative and entertaining book to everyone.

Giordano Bruno

That Vast Right Wing Conspiracy, July 7, 2009

...which our former First Lady so fatuously denounced in defense of her wandering spouse,
wasn't really such a flight of fancy. After all, the entire history of partisan politics in
America began with the conspiracy of Jefferson, Madison, Gallatin and others which came to be
known as the Democratic Republican Party. Author Kim Phillips-Fein presents detailed and thoroughly
convincing evidence, in this eye-opening book, that `conspiratorial' activities among a small
group of American businessmen opposed to the goals and values of New Deal liberalism succeeded,
over decades, in building a political movement and "....changing the world. Long before the
`culture wars' of the 1960s sparked the Republican backlash against cultural liberalism, these
high-powered individuals actively resisted New Deal economics and sought to educate and organize
their peers [i.e. wealthy businessmen] as a political force. They fundraised, helf conferences,
supported sympathetic scholars and media outlets, founded institutes, fought unions, and recruited
candidates for high office -- all with the aim of rescuing America, and their profit margins...."
Author Phillips-Fein, please understand, does not mean to imply that such conspiracy is inherently
malicious or misbehavior. Working for one's ideals behind the scenes is obviously a democratic
right, indeed, the properest behavior of an individual in a political society. Nevertheless,
a very disturbing tale is documented in this book: of deception and hypocricy; of corruption
of the electoral, judicial, and legislative processes; of the ruthless use of power and money;
of indifference to the welfare of ordinary people; of ideological fanaticism; of the exploitation
of dangerous social divisions for political advantage; of skillfully camouflaged Class Warfare
against the `lower' classes and their champions; of plutocracy in the saddle.

William Baroody? Lemuel Boulware? Ralph Cordiner, Pierre du Pont, Clarence Manion, Leonard
Read, Richard Viguerie, F. Clinton White? How many of these names are familiar to most of us,
and yet they were all movers and shakers of American politics without ever holding office or
confronting an election.

ACU? American Conservative Union! AEA, later AEI? American Enterprise Institute! American
Liberty League, Business Roundtable, Cato Institute, Committee for Economic Development, Foundation
for Economic Education, Hoover Institution, J. Howard Pew Freedom Trust, Manion Forum of Opinion,
Mont Pelerin Society, NAIB, NAM, NCAC, NICB, NRWC, Olin Foundation, Ripon Society, and oh yeah,
the John Birch Society, let's not forget! These and many others, of transient or permanent influence,
were the frontline agencies of the capitalists' crusade against New Deal liberalism. Often the
directors and spokesmen they supported turned out to be the campaign managers, advisors, powers
behind the thrones of elected "leaders."

This is a difficult book to review! I feel I'd need to transcribe half the text of it to
do it justice. There's so much that I didn't know in it. So much that I suspected but couldn't
prove! So many aha! moments of history revealed! Readers over thirty? You think you know what
happened? This is a `story' you'd better read!

Let's spot a few key pages:

Page 10: In July 1934, the du Pont brothers organized the Liberty League, a "property-holders'
association to disseminate information as to the dangers to investors posed by the New Deal...."
which they hoped "would be able to make alliance with other organizations... that defended the
Constitution, such as the American Legion and even the Ku Klux Klan."

Page 57: "The businessmen of the NAM, those who contributed to the Mont pelerin Society,
the small manufacturers and retired executives and management men who resnted the power of unions
-- all reacted to Eisenhower's endorsement of the basic principles and framework of the New
Deal with shocked dismay. Few went as far as Robert Welch... founder of the John Birch Society,
who suggested that Eisenhower was literally a communist agent..." [Sound familiar in 2009, when
right wing voices are screaming that Barack Obama is another communist agent, i.e. another Eisenhower?]
There is no question that a labor union is as much a `conspiracy' as the Chamber of Commerce.
Blame isn't the issue here. Anti-union stances and actions have been one of the contants of
the Conservative movement, and they have been painfully effective. From Eisenhower's blandly
supportive stance toward unionism, to Reagan's vigorous anti-labor interventions, the Republican/conservative
movement has used fair and unfair tactics, honest expression and dishonest media manipulation,
to curtail the struggles of labor and the employees of America to improve their economic status.

Pages 72/73: The alignment of libertarian capitalist ideology with conservative Christian,
and later fundamentalist Christian, beliefs has older, deeper roots than most people now suppose.
The Mont Pelerin Society and "The Family" have interlocking visions... and donors. Here's Abraham
Vereide: "There has always been one man or a small core who have caught the vision for their
country and become aware of what `a leadership led by God' could mean spiritually to the nation
and the world." the presidency of George W Bush would seem to have been exactly what Vereide
had in mind.

Page 84/85: The author turns to the example of the Manion Forum to reveal how parallel capitalist/libertarian
ideology has always run to racism, to the perverted social Darwinism that rages against "the
descent of the Nation into the Marxist Welfare state." Funny isn't it, how libertarianism and
eugenicism can blend in operation... Racist and rabid anti-communist Clarence Manion was one
of the founders of William Buckley's National Review, while Buckley hismelf donated money to
the manion Forum.

Some much material! Let's leap toward the present, to 1971:
Pages 156/165: Super-rich department store magnate Eugene Sydnor asked his lawyer friend Lewis
Powell, his neighbor in Richmond VA, to write a "memorandum for the Chamber of Commerce, outlinig
a thoroughgoing political strategy that the business community could use to confront" the threats
of liberalism. Powell complied with a bold document titled The Attack on the Free Enterprise
System, in which he denounced not only "extremists from the left [but also] perfectly respectable
elements of society: from the college campus, the pulpit, the media, the intellectual and literary
journals, the arts and sciences, and from politicians." Among the measures Powell advocated
was... JUDICIAL ACTIVISM: "The judiciary may be the most important instrument for social, economic,
and political change." Two months after the confidential circulation of Powell's memorandum,
Richard Nixon nominated him to the Supreme Court; in the confirmation hearings, Powell was reticent
-- read `hypocritical' -- about his ideological positions, making no mention of his Chamber
of Commerce memorandum. In fact, that document was not made public until columnist Jack Anderson
leaked portions of it in the Washington Post. Powell, the stealth candidate, was of course confirmed
and played a major role in Court decisions thwarting campaign finance reform.

The culmination of the movement Phillips-Fein chronicles was obviously the election of Ronald
Reagan and the installation of anti-New Deal economic conservatism as the orthodoxy of American
political thinking, a semi-consensus that lasted through the presidencies of Reagan, Bush, and
Clinton. That it finally collapsed under the second Bush is beyond the scope of this book.

This is the most enlightening study of American political history I've read in decades. Don't
dismiss it on the basis of any established political alignments! It's not an attack on the right
wing. It's not a doctrinaire manifesto of any faction. It's good, honest scholarship.

New York University professor, occasional contributor to the Baffler and The Nation, Kim
Phillips-Fein takes as her subject in "Invisible Hands" the history of the modern Conservative
movement in the United States from its origins in opposition to the New Deal to the inauguration
of the Reagan administration.

While I'm pretty sure Phillips-Feins sympathies are to the left, she manages to deal with the
motley crew of Conservative activists, politicians and businessmen who make up the Conservative
movement during the half century she covers in an impartial manner. She details the movement
from its roots in opposition to the New Deal: that particular change in the political environment
after the inauguration of FDR in 1933 to one that was conducive to the growth in the influence
of ordinary working people (in particular their Unions), and a growing trend for (some) politicians
to recognise that the ordinary Americans interest was not always identical to that of American
Businesses.

The story continues with the second world war (during which conservative/business interests
regained a degree of power and influence), the gradual post-war roll back of Unions and Liberal
politics during the oppressive years of McCarthyism, through to the Goldwater run for the presidency
in 1964. Goldwater failed in his run, but the victor - Lyndon Johnson - failed to keep out of
Vietnam: the growing involvement in that miserable War and the financial costs undermined his
"Great Society" program, the last substantial attempt by an American President to govern with
a relatively Liberal domestic policy (which in a European sense would be roughly equivalent
to a diluted version of Social Democracy). Within fifteen years of the Goldwater failure, the
movement is backed by serious money, has parlayed that money into substantially successful attempts
to win the war of ideas (through well funded think tanks and foundations), turned the focus
of popular politics away from socio-economic issues to those of the so-called "Culture Wars",
and has a congenial figurehead for the 1980 election campaign: Ronald Reagan. The rest is another
story. . .

"Invisible Hands" is also excellent on the individuals involved from the ostensibly cerebral
Milton Friedman and the Mont-Pelerin Society of von Hayek and von Mises, to the more combative
characters such as Jesse Helms and Barry Goldwater. But this is far more than a study of individuals:
it tells the story of the movement as it grew, and how the connections between the disparate
elements of the movement coalesced (she plausibly makes a case for the failed Goldwater run
for president in 1964 being critically important to that process) eventually leading to the
Reagan presidency.

Kim Phillips-Fein has written a fine and scholarly work, which contains a substantial amount
of research, is written in a clear and comprehensible manner, and it's her first book length
publication. It is one I'd thoroughly recommend to anyone who has an interest in how Politics
actually functions as opposed to the simplified storytelling which by and large passes for news.

Another excellent book on American Conservatism I'd recommend, though it leaps forward to the
post-Reagan era, would be Thomas Franks account of Conservatives in power:
The Wrecking Crew.

Outstanding Book on the Laissez-Faire Conservative Movement Culminating in Ronald Reagan,
November 6, 2011

This is an excellent and unbiased history from the 1930s onward
of the efforts by a group of laissez-faire business leaders, such as the du Ponts and Lemuel
Boulware, to react against the New Deal (some would say overreacting), promote a new vision
of anti-government and pro-business ideas, and build a broader coalition beyond them that could
win elections. It explains their activities, such as the Liberty League and conservative think
tanks, and the economic philosophies they espoused, such as the respected Nobel Prize winning
economist F. A. Hayek's
The Road to Serfdom,
the Nobel Prize winning economist Milton Friedman, and the more extreme philosophy (some would
call it extreme selfishness) of Ayn Rand called objectivism. It explains the electoral coalitions
with religious groups and other social conservatives, which turned the southern states from
Democrat to Republican. This culminated in the election of Ronald Reagan. This is an exceptional
history of the conservative movement in America in the second half of the 20th Century to roll-back
unions, promote free exercise of business competition, and what Nobel Prize Winning economist
Paul Krugman called "the great compression" in
The Conscience of a
Liberal. It also is an essential history of Ronald Reagan. Highly recommended! My only quibble
is that it could have said more about the Great Society. This book received starred reviews
from both Publishers Weekly and Kirkus Reviews.

Kirkus Reviews called this book "The riveting story of how economic conservatism became one
of the leading strands in American political thought... from its birth as a big-business reaction
to the New Deal to its zenith as a key element of the Reagan Revolution in the early '80s...
focusing instead on the unique individuals behind the movement... the wealthy du Pont family...
Friedrich von Hayek... big-business associations as the Liberty League and the National Association
of Manufacturers... the colorful characters who brought conservatism into mainstream popular
culture during the '50s, including National Review editor William F. Buckley and novelist/philosopher
Ayn Rand... General Electric executive Lemuel Ricketts Boulware... GE employee Ronald Reagan...
the merging of economic conservatism, anticommunism and religious and moral thought... evangelists
like Jerry Falwell... Barry Goldwater... Reagan... Engaging history."

Publisher Weekly said, "Looking beyond the usual roster of right-wing Christians, anticommunist
neo-cons and disgruntled working-class whites, this incisive study examines the unsung role
of "a political movement of businessmen" in leading America's post-1960s rightward turn. Historian
Phillips-Fein traces the hidden history of the Reagan revolution to a coterie of business executives,
including General Electric official and Reagan mentor Lemuel Boulware, who saw labor unions,
government regulation, high taxes and welfare spending as dire threats to their profits and
power. From the 1930s onward, the author argues, they provided the money, organization and fervor
for a decades-long war against New Deal liberalism--funding campaigns, think tanks, magazines
and lobbying groups, and indoctrinating employees in the virtues of unfettered capitalism. Theirs
was also a battle of ideas, she contends; the business vanguard nurtured conservative thinkers
like economist Friedrich von Hayek and his secretive Mont Pellerin Society associates, who developed
a populist free-market ideology that persuaded workers to side with their bosses against the
liberal state. Combining piquant profiles of corporate firebrands with a trenchant historical
analysis that puts economic conflict at the heart of political change, Phillips-Fein makes an
important contribution to our understanding of American conservatism."

Booklist (Gilbert Taylor) said, "Although many books have been written about American conservatism,
most concern its cultural or political manifestations, and almost all bring bias to the subject.
The contribution of Phillips-Fein to this literature is distinctive in two respects: she maintains
neutrality and produces original research on American business executives and public-relations
specialists who created conservative organizations from 1933 to 1980. Although scholarly in
tone (her work originated as a dissertation), the book is highly readable for its absorbing
historical background about contemporary conservative advocacy outfits, such as the American
Enterprise Institute. In their variety of characters and degrees of indignation about the iniquities
of the New Deal and its descendants, the individuals introduced range from the reasonable to
the strange, which enlivens a narrative of free-market conservatism's incubation in the 1940s
and 1950s. Detecting a union-busting agenda behind the liberty-proclaiming rhetoric of business
leaders, Phillips-Fein nevertheless allows them a fair hearing about their roles in, ultimately,
the electoral victory of Ronald Reagan in 1980. A valuable addition to the history of conservatism."

Also read The Conscience
of a Liberal by Nobel Prize-winning economist Paul Krugman with an alternative interpretation
of why Reagan Democrats switched to voting Republican (namely a reaction to 1960s and 1970s
liberalism and civil rights).

For context, read a reputable biography of FDR or a reputable history of the New Deal, warts
and all, (not one of the smear books of the New Deal) to learn more about the periods preceding
this economic conservative movement to know how it came about. Learn the real mistakes and enduring
achievements of the New Deal. Also read a good biography of Dwight Eisenhower to learn about
a more moderate and mainstream Republican view from that era.

As a contrast, an interesting book from the Eisenhower era is
How to Be Rich,
written by the richest business man in the world at the time, J. Paul Getty. It accepts the
more moderate view of mainstream Republicans and makes an interesting contrast to the views
of the du Ponts and Boulware. Also,
The Autobiography of
Andrew Carnegie and The Gospel of Wealth by Carnegie is strikingly different. The conservative
movement described in the book was definitely a departure from that thinking.

No deep appreciation of the dynamics of the American political economy in 2009-2010 is possible
without understanding the importance of economists Friedrich von Hayek and Ludwig von Mises,
as well as religious fundamentalists Jerry Falwell and Pat Robertson. Throw in some fascinating
background on George Gilder, and the politics of the past two years begin to make much more
sense, and we have Kim Phillips-Fein to thank for that. And for pointing out what American Progressives
probably don't want to hear, but need to: that "the most striking and lasting victories of the
right have come in the realm of political economy rather than that of culture."

Phillips-Fein also makes two fascinating observations about these Austrian economists in
Invisible Hands, important for the major concerns of this essay: how The Market has assumed
religious dimensions and attributes, especially here in the United States, and how it "assumes"
different "moods" or attributes - projections if you would prefer - of its human inventors,
recalling our wonderment at the anthropomorphic projections upon the Greek or Roman deities,
or the Calvinist constructions of the 16th century. The first is Hayek's admission, in his famous
Road To Serfdom, that "at times modern man would feel subordinated to the market and would chafe
against economic forces that he could not control. But he argued that submission to the marketplace
was infinitely preferable to deference to a ruler. `Unless this complex society is to be destroyed,
the only alternative to submission to the impersonal and seemingly irrational forces of the
market is submission to an equally uncontrollable and therefore arbitrary power of other men.'"(Page
37.) Now that's what I call "market fundamentalism," with not much room left for the politics
of democracy (freedom in his view, comes from The Market), much less Social Democracy with its
mixed economy and deep and open involvement in a fully recognized "political economy." The other
stunning comment here, on what I will call the "brittle Prometheanism" of The Market, is the
attribute that insists upon "hands off!" from government interventions. It has two features:
that the market is spontaneous, "a complex system that came into existence without forethought
or planning...the robust force that generated all of life and human production and a terribly
fragile entity, threatened on all sides...in desperate need of protection..."(Ibid.)

Although there is a great deal else that happens to build conservative momentum inside the
economics profession, especially the development of the rational expectations school and the
efficient market hypothesis, readers wondering about our nation's strange 40 years' wanderings
towards the edge of the economic cliff won't stray far from the path if they will remember these
key features bequeathed by the Austrians. Yet as important as they for our understanding, they
nonetheless don't tell the full story. For that, we must turn to the nature of the response
from the religious fundamentalists to what is going on in the turbulent world of the 1970's
- economic events, certainly, but also cultural ones as well.

Building the Conservative Coalition
As Kim Phillips-Fein lays out for us in Invisible Hands, political conservatives, especially
business conservatives, were lamenting their lack of a grass-roots movement to counteract the
power of labor which grew out of the organizing successes of the 1930's and the legal sanction
bestowed by the New Deal. Protestant churches were the logical place to turn, but the climate
in their pulpits, in the wake of the New Deal, and indeed, ever since the rise of the Social
Gospel in the late nineteenth century and early twentieth century Progressive Era, was not very
receptive. "The basic argument was that Christianity had too long been associated with altruism,
selflessness, and a devotion to helping the poor - principles that might lead good Christians
to advocate government intervention in the economy. To counter this idea, Spiritual Mobilization
insisted that Christianity was rightly associated with shrinking the welfare state." (Page 74).
Spiritual Mobilization was, among other things, an attempted collaboration between J.Howard
Pew's Sun Oil-generated money and the religious organizing genius of James Fifield, a dynamic
Congregational minister with a huge parish in Los Angles, who had originally founded Mobilization
in the 1930's. And one of the first outreach efforts is to mail out free copies of Hayek's The
Road to Serfdom in an attempt to gauge the mood amongst the ministers. Although it faltered
in the 1950's, Spiritual Mobilization foreshadowed the framework for the conservative alliance
in the 1980's.

Although most of my readers will be familiar with religious fundamentalism's focus on personal
morality - crime, sexual transgressions, gender roles and abortion - much less attention has
been paid to its attitudes towards economic questions and the role of the federal government.
Because they have been part of powerful national political coalition, the Republican Right,
since the late 1970's, and one where it is not clear that the leadership positions on economic
questions fit comfortably with the economic needs of many in their congregations, nor where
the steady green light given to rapid economic changes fits logically with the biblical and
theological inflexibility, it behooves Progressives to take a closer look at how this coalition
handles these tensions. All the more so during times when core portions of the national identity
- the American Way of Life - Economic Abundance and Leadership, Moral Leadership, Success in
War - seemed to be in decline. Indeed, as we will see, the relation of alleged moral decline
linked to various forms of real or perceived national decline, is a theme that runs right back
to the nation's Puritan roots in 17th century New England, and is in turn, closely linked to
the Protestant Ethic and the earliest capitalist traditions of the nation.

We have stressed the importance of the various national shocks of the 1970's; so how did
two of the most important fundamentalist religious leaders react to them, since both Pat Robertson
and Jerry Falwell would play key roles in putting together the Republican Right coalition? First,
we have to note, in partial answer to the seeming incongruity of fixed-theology fundamentalists
advocating a permanent green light for the creative destruction of restless capitalism, that
these religious leaders were businessmen as well as evangelists, familiar with the cutting edge
technologies they utilized to spread their message by print, radio, and especially, television.
It may have been for Falwell the nostalgia dripping title of the "Old-Time Gospel Hour," but
it was also an example of electronic savvy and a cash-cow. In 1978, he began publishing a newspaper
called the Journal-Champion which went heavily political, with a surprising dose of economic
issues. Of course it had the standard pleas to "cleanse America of sexual sin," but it also
took positions against federal bureaucratic interventions (OSHA), in favor of the California
property tax revolt (Proposition 13), and against a federal bail-out of NY City. On the alarming
national inflation of the 1970's, Falwell wrote that "God is bringing the entire nation to its
financial knees. If we want to control inflation, we should set our spiritual house in order."
(Phillips-Klein, Pages 228-230.) (Contrast that to Galbraith's remedy, never applied, of complex
wage and prices controls, structured to account for the large firm/small business dichotomies
in the US economy, and biographer Parker's call for - and the implied military threat - to force
a roll-back of the OPEC oil price shocks - something he said Kissinger and Nixon wouldn't countenance
for fear of roiling the tinderbox of the Middle-East).

And 30 years ago, in 1979, Pat Robertson issued his "Christian Action Plan to Heal Our Land
in the 1980's." In one respect, it seems like it was a reversal of Falwell's diagnosis of cause-and-effect:
"Robertson indicated that the moral illness threatening the United States in the late 1970's
had its roots in the nation's political economy." It's timing was 50 years after the onset of
the Great Depression, and it's pretty clear that Robertson blamed the liberal tools set in motion
by the New Deal for the ills of the 1970's: "`a powerful central government...an anti-business
bias in the country...powerful unions' and most important of all, `the belief in the economic
policy of British scholar John Maynard Keynes...'" He conceded some positive good to them in
curing the Great Depression, but "fifty years later they were responsible for the `sickness
of the `70's - the devaluation of the dollar, inflation, the decline in productivity." The remedy?
A "`profound moral revival'" and the election of those who would "`reduce the size of government,
eliminate federal deficits, free our productive capacity, ensure sound currency.'" (Phillips-Fein,
Page 225).

As noted, the cause and effect between economic decline and moral failings may get switched
with less than airtight rigor within the worldview of even these two major fundamentalist leaders,
but if we recall that in the 1970's and 1980's the charge was often made by conservatives that
the liberal welfare state, especially its Aid to Families with Dependent Children Program (AFDC),
aka as "welfare," was undermining both morals and marriage, then the seeming inconsistency here
can be clarified. And who better to further shine a light on these matters of the moral economy,
than the fascinating figure of George Gilder.

George Gilder and a Morality Enforced by The Market
This writer didn't know, until reading Invisible Hands, that Mr. Gilder was raised, after the
death of his father, with the help of the Rockefeller family, especially David, who was a roommate
of his father's at Harvard, nor was I aware of his two books published before the famous Wealth
and Poverty of 1981. Wikipedia also notes that he attended a private school in NY City, Hamilton,
then Phillips Exeter Academy and finally Harvard. I note these biographical features with interest
because, as Thomas Frank tells us in One Market Under God (2000), Gilder was a proponent, among
many notions, of the idea of class warfare "between righteous new money, the entrepreneurs who
created wealth, and bitter frustrated old money..." The new entrepreneurs "were both society's
`greatest benefactors' and yet also the `victims of some of society's greatest brutalities'"
at the hands of "`the mob'" which turns out to be incited by... "...the very rich, the people
of inherited but declining wealth whom, Gilder imagined, controlled `the media and the foundations,
the universities and the government.'" (Page 35). Gilder's background is also ironic in light
of his high flights into the realm of market populism, especially with the rise of the Internet
and its entrepreneurs. But that's a digression from Invisible Hand's reminder of his earlier
works.

The language Phillips-Fein uses to describe the early Gilder is revealing for the purposes
of this essay. Gilder "wrote passionate jeremiads against modern liberalism's effect not only
on the economy but on culture, sexual relationships, and morality...His first book, Sexual Suicide
(1973), was a harsh critique of the women's movement; his second, Naked Nomads (1974), catalogued
the hazard that single, unattached men posed to social order."(Page 177, My Emphasis.) In Wealth
and Poverty, however, Gilder was trying "to demonstrate that capitalism was an inherently moral
economic order." These were not entrepreneurs driven by greed; "they wanted merely to have the
`freedom to consummate their entrepreneurial ideas,'" driven by "a spirit closely akin to altruism...'"
(Ibid.) But then, like a turn in Zeus's mood, the market shows us another face, and becomes
"a measuring stick for morality that meted out rewards to people who lived virtuous lives while
punishing those who violated codes of decency. `Work, family, and faith' were the only solutions
to poverty." And now for Gilder's main thrust:
that "the real danger of the welfare state was that it created a mode of subsistence and survival
free of the morality enforced by the market." (Page 178. My Emphasis.)

Readers who would like to read more about the importance of Invisible Hands can find it as
part of a longer essay, "Sinners in the Hands of an Angry Market" [...]

'But I now also suspect that the personality traits you need to be an effective entertainer
on inherently not-so-much-fun subjects like health or monetary policy are inherently at odds
with the traits you need to be even halfway competent. If Dr. Oz were the kind of guy who pores
over medical evidence to be sure he knows what he's talking about, he probably couldn't project
the persona that wins him such a large audience. Similarly, a hired-gun economist who actually
knows how to download charts from FRED probably wouldn't have the kind of blithe certainty in
right-wing dogma his employers want.'

---

The audience prefers the entertainer over the professional despite losing their bets on the
economy. The entertainer is selling, the professional is explaining. Some can do both but it
is a rare professional who is selling in identical fashion what would be explained absent additional
benefit.

Much economics encompasses all occupations while particular occupations do not necessarily
encompass the reach of economics. A favorite endless cheap shot of glib entertainers is to separate
themselves from serious economists as 'working up close and personal in the real world' where
economists 'never go'.

This gives entertainers license to mock economic predictions at will as they bond with the
audience who pays them for therapy over professional advice. It is win-win for the audience
and entertainer all around even as they lose their bets against the likes of inflation, interest
rates and other predictions validated in hindsight.

The entertainer is regarded as a 'sincere' member of the tribe who believed in his or her
predictions and went down with the ship, only to survive repeatedly and show up with more entertainment.

So more than half of the health advice Dr. Oz gives is either baseless — there's
no evidence for his claims — or wrong — there is evidence, and it contradicts what
he says. Julia Belluz tells us not to be surprised: *

"He is, after all, in the business of entertainment."

But the thing is, there are a lot of Ozzes out there, including in areas you
might not consider the entertainment business.

Recently some conference planners tried to recruit me for an event in which I
would be presenting the alternative view to the main experts — Arthur Laffer and
Stephen Moore. This would be the Art Laffer who among other things warned about
soaring inflation and interest rates thanks to the rapid growth in the monetary
base (ask the Swiss), and the Stephen Moore who was caught using fake numbers to
promote state-level tax cuts.

Obviously these "experts" appeal to the political prejudices of a business audience,
but taking their advice would have cost you a lot of money. So why isn't their popularity
dented by the repeated pratfalls? Are they, also, in the entertainment business?

To some extent, the answer is yes. Simon Wren-Lewis had an interesting piece
on why the financial sector buys into really bad macroeconomics; he suggested that
financial firms aren't really interested in anything but very short-term forecasting,
and that:

"economists working for financial institutions spend rather more time talking
to their institution's clients than to market traders. They earn their money by
telling stories that interest and impress their clients. To do that it helps if
they have the same worldview as their clients."

Thinking about Dr. Oz also, I'd suggest, helps explain a related puzzle: even
if you grant that the right wants alleged experts who toe the ideological line,
why can't it get guys who are at least competent? Why do they recruit and continue
to employ people who can't do basic job calculations, or read their own tables and
notice that they're making ridiculous unemployment projections, and so on?

My answer has been that anyone competent enough to avoid these mistakes would
also be unreliable — he or she might at some point actually take a stand on principle,
or at least balk at completely abandoning professional ethics. And I still think
that's part of the story.

But I now also suspect that the personality traits you need to be an effective
entertainer on inherently not-so-much-fun subjects like health or monetary policy
are inherently at odds with the traits you need to be even halfway competent. If
Dr. Oz were the kind of guy who pores over medical evidence to be sure he knows
what he's talking about, he probably couldn't project the persona that wins him
such a large audience. Similarly, a hired-gun economist who actually knows how to
download charts from FRED probably wouldn't have the kind of blithe certainty in
right-wing dogma his employers want.

So how do those of us who aren't so glib respond? With ridicule, obviously. It's
not cruelty; it's strategy.

Economists are well paid in the same way high level prostitutes are well paid. They are need to
provide intellectual capture of regulators. Much of the assumed authority of economists is socially
constructed by financial oligarchy with a very specific purpose. From comments: "All the
evidence it contains is consistent with economics being a hierarchy-obsessed cargo cult. But all its
evidence is also consistent with economists having better and more consistent quality criteria, better
sorting, and larger grad programs at the top. "

One especially unfortunate aspect of economics is that its penchant for just-so stories can reinforce
its imperialist blindnesses.

If you've been trained systematically to look for examples of market efficiency winning out,
you'll likely be inclined to treat your own, and your discipline's success as examples of market
efficiency in action.

George Mason University law school's
Moneybollocks
mythology provides one cautionary tale as to how this can lead one to systematically overlook
the role of politics in determining who wins and who loses.

The underlying point of the Fourcade et al. article is that politics and power play a far larger
role in determining both the success of economics and the success of economics than economists are
prepared to admit in public. Or, more succinctly, sociology provides a much better account of economics'
success than economics itself does. Obviously, that's a claim that's going to be uncongenial to
economists, as well as one that many economists will have difficulty in absorbing (they usually
aren't trained to think in that way). If they were better versed in sociology, and also somewhat
paranoid, they might want to treat the piece as a meta-Bourdieuian Trojan horse, that inherently
elevates sociology at the expense of economics (although these imaginary well-read paranoid economists
would still somehow have to deal with Fourcade's previous work, which has tacitly rebuked economic
sociology for its obsession with disproving economics). But the point would still remain – that
the internal structures of economics, as well as its external influence, are very far indeed from
a free market.

Ben 12.02.14 at 9:24 pm

In other word, economics has done a better job of cozying up to power.

Which is not entirely the discipline's own fault, given that the powerful have always seen it
as an important tool for their legitimation. (e.g. see here)

js 12.02.14 at 10:40 pm

It's a great paper. And man, further confirmation—if any were needed—that business schools
majorly suck!

Sasha Clarkson 12.02.14 at 11:13 pm

"… It's probably because…drumroll…economics is the discipline that studies the economy. "

Economics is not the discipline: it is a set of disciplines which share a name, some jargon
and common ideas: not unlike, say, evolutionary biology and "intelligent" design creationism.
Except that in economics there is more than one form of creationism: Marxism and Austrianism
come to mind. Creationist economics studies the world(s) some people believe ought to exist.
Austrianists even define "inflation" in their own unique way, but then try to coerce everyone
else's reality to match their theology.

The economics of the real world has evolved since Keynes, just as biology has changed since
Darwin and cosmology since Kepler. But the key thing about non-creationist economics is that
evidence matters and will lead to the model being modified accordingly. After Tycho Brahe died,
in 1601, Johannes Kepler tried to develop a new cosmological theory based on circular orbits
around an off-centre sun. After years of work, he rejected his beloved theory because it was
incorrect about Mars' position by 8 minutes of arc: 2/15 of a degree. Kepler wrote: "Because
these 8′ could not be ignored, they alone have led to a total reformation of astronomy."* He
then spent several more years developing his theory of elliptical orbits which made predictions
accurate enough to satisfy him.

Some "economists" have been predicting US hyperinflation for years: it's failure to materialise
is a vast error compared with Kepler's 8 minutes of arc: but there has been no urge to modify
the theory.

*Translated by Arthur Koestler in The Sleepwalkers.

door 12.02.14 at 11:21 pm

The root problem is that economists, and economics, frequently make policy prescriptions
— normative judgments — even though they have very little knowledge of or training in normative
ethics and moral philosophical argumentation. The real normative action is instead often
concealed under technical phrases and axioms and simplifications that when scrutinized lack
convincing justification and tend to be biased towards right-wing policies and the status quo
distribution of power and wealth.

Rakesh 12.03.14 at 12:59 am

Another great thing is the comfort economics gives me that amidst all the chaos of unemployment,
bankruptcies, and cycles there is an equilibrium that markets are just about to achieve,
perhaps with just a little expert guidance and the right human sacrifices at the right time.

JanieM 12.03.14 at 4:38 am

"The economy" has become like this mythical, but nonetheless terribly important and pitifully
fragile, little flower, that we can't ever actually see or touch, but all have to look after
and think about and be terrifically careful of, otherwise it will just suddenly die and take
us all with it. It's nonsense. We should be thinking about how we, as human beings, look after
each other and the earth that sustains us.

Well said.

John Emerson 12.03.14 at 5:11 am

Suppose a Pol Pot came to power and all economists were liquidated. How much would the economy
suffer? Would the economics profession be revived in its present form, or would something strikingly
different be developed which did all the jobs economics does, but without the arrogance and
the ideological and methodological dead weight?

This is a THOUGHT EXPERIMENT, not a suggestion. Like a trolley car problem. There are no actual
trolley cars with fat men being pushed in front of them, and there is no actual Pol Pot in the
offing. Perhaps I should have hypothesized that The Rapture carried off every economist in the
world, but no one else, but that's even less realistic. Let's just assume that all economists
were pensioned off at twice their present salary on the condition that they quit doing economics.
That would be both humane and practical.

Bruce Wilder 12.03.14 at 6:02 am

Rakesh @ 19 — I admit it: I got that far before catching on.

Tom @ 16:

Economists have quant skills (as Smith says) and also their skills can be used in sectors
where there is a lot of money. Finance, first of all. . . . That is why they make more than
statisticians and that is why actuaries make more than economists. And that is why math
and engineering people who study finance end up making a fair amount of money. . . . Obviously
expertise is a matter of legitimation . . .

Economists have legitimated making a lot of money in finance, even though making a lot of
money in finance is pretty obviously deleterious for society, aka the vast majority of people.
It is kind of circular: bad economics opens opportunities for bad economists to make a lot of
money doing bad economic things.

Commenter @ 13: All the evidence it contains is consistent with economics being a
hierarchy-obsessed cargo cult. But all its evidence is also consistent with economists having
better and more consistent quality criteria, better sorting, and larger grad programs at the
top.

Two mints in one! Policy macroeconomics pretty much is a cargo cult, as far as its content
is concerned. This is widely acknowledged in Naked Emperor remarks and so on, but it doesn't
seem to matter. Which, I suppose figures in the motivations for the research of Fourcade et
alia. It is the contrast between outside political critiques and "derision" directed at economics
and the arrogant confidence of its inside practitioners about which the authors are most curious.

Tabasco @ 9

You don't need to know anything about the economy to be a highly successful economist,
in the sense of the getting papers published in the best journals. And knowing a lot about
the economy not only is no guarantee of career success, it invites condescension from economists
who wear the ignorance about the economy as a badge of honor and sneer openly that economists
who study the economy are just journalists.

Said as plainly and bluntly as that, it can seem like superficial sarcasm, but it is so accurate
a description. The emphasis on "rigor" and the pride in irrelevant maths becomes a remarkable
absence of curiosity and a doctrinal rigidity in a sizeable and highly influential minority
of economists. And, all that is compounded by the rank corruption afforded by those fabled consulting
opportunities.

A H 12.03.14 at 7:05 am

The market is for private sector PhD economists is not that large, so I don't think there is
a direct outside demand pulling up econ wages. If anything, PhDs have a reputation for being
awful at making money in finance.* Though it is pretty easy for a new PhD to jump into a consulting
career.

I would guess is that where wages are getting driven up is in the demand for business school
teachers. As inequality increases, MBAs become a path to the 1% and B schools become profit
centers. They need lots of econ profs hence wages go up in Econ.

Seven Bad Ideas: The economics profession has not, to say the least, covered itself in glory
these past six years. Hardly any economists predicted the 2008 crisis — and the handful who
did tended to be people who also predicted crises that didn't happen. More significant, many
and arguably most economists were claiming, right up to the moment of collapse, that nothing
like this could even happen.

Furthermore, once crisis struck economists seemed unable to agree on a response. They'd had
75 years since the Great Depression to figure out what to do if something similar happened again,
but the profession was utterly divided when the moment of truth arrived.

In "Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World," Jeff Madrick
— a contributing editor at Harper's Magazine and a frequent writer on matters economic — argues
that the professional failures since 2008 didn't come out of the blue but were rooted in decades
of intellectual malfeasance. ...

Jesse:

This is what happens when professionals become addicted to the pursuit of money and personal
power. Granted it was the prevailing compulsion of the age of greed, and economists were hardly
the worst, being more enablers than perpetrators.

So what ought professional thought leaders do next?

-examine past errors with the help of an objective advisor;
-make amends for these errors;
-learn to live a new life with a new code of behavior;
-help others who suffer from the same compulsions especially in the area of finance and politics,
and from the damages that have been inflicted on them.

pgl:

This is a book we all need to read.

ilsm -> pgl:

Historical context:

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present by Jeff
Madrick (Author) (C) 2011.

NEW YORK – "If the facts don't fit the theory, change the theory," goes the old adage. But
too often it is easier to keep the theory and change the facts – or so German Chancellor
Angela Merkel and other pro-austerity European leaders appear to believe. Though facts keep
staring them in the face, they continue to deny reality.

Austerity has failed. But its defenders are willing to claim victory on the basis of the weakest
possible evidence: the economy is no longer collapsing, so austerity must be working! But if
that is the benchmark, we could say that jumping off a cliff is the best way to get down from
a mountain; after all, the descent has been stopped.

But every downturn comes to an end. Success should not be measured by the fact that recovery
eventually occurs, but by how quickly it takes hold and how extensive the damage caused by the
slump.

Viewed in these terms, austerity has been an utter and unmitigated disaster, which has become
increasingly apparent as European Union economies once again face stagnation, if not a triple-dip
recession, with unemployment persisting at record highs and per capita real (inflation-adjusted)
GDP in many countries remaining below pre-recession levels. In even the best-performing economies,
such as Germany, growth since the 2008 crisis has been so slow that, in any other circumstance,
it would be rated as dismal.

The most afflicted countries are in a depression. There is no other word to describe an economy
like that of Spain or Greece, where nearly one in four people – and more than 50% of young people
– cannot find work. To say that the medicine is working because the unemployment rate has decreased
by a couple of percentage points, or because one can see a glimmer of meager growth, is akin
to a medieval barber saying that a bloodletting is working, because the patient has not died
yet.

Extrapolating Europe's modest growth from 1980 onwards, my calculations show that output in
the eurozone today is more than 15% below where it would have been had the 2008 financial crisis
not occurred, implying a loss of some $1.6 trillion this year alone, and a cumulative loss of
more than $6.5 trillion. Even more disturbing, the gap is widening, not closing (as one would
expect following a downturn, when growth is typically faster than normal as the economy makes
up lost ground).

Simply put, the long recession is lowering Europe's potential growth. Young people who should
be accumulating skills are not. There is overwhelming evidence that they face the prospect of
significantly lower lifetime income than if they had come of age in a period of full employment.

Meanwhile, Germany is forcing other countries to follow policies that are weakening their economies
– and their democracies. When citizens repeatedly vote for a change of policy – and few policies
matter more to citizens than those that affect their standard of living – but are told that
these matters are determined elsewhere or that they have no choice, both democracy and faith
in the European project suffer.

France voted to change course three years ago. Instead, voters have been given another dose
of pro-business austerity. One of the longest-standing propositions in economics is the balanced-budget
multiplier – increasing taxes and expenditures in tandem stimulates the economy. And if taxes
target the rich, and spending targets the poor, the multiplier can be especially high. But France's
so-called socialist government is lowering corporate taxes and cutting expenditures – a recipe
almost guaranteed to weaken the economy, but one that wins accolades from Germany.

The hope is that lower corporate taxes will stimulate investment. This is sheer nonsense. What
is holding back investment (both in the United States and Europe) is lack of demand, not high
taxes. Indeed, given that most investment is financed by debt, and that interest payments are
tax-deductible, the level of corporate taxation has little effect on investment.

Likewise, Italy is being encouraged to accelerate privatization. But Prime Minister Matteo Renzi
has the good sense to recognize that selling national assets at fire-sale prices makes little
sense. Long-run considerations, not short-run financial exigencies, should determine which activities
occur in the private sector. The decision should be based on where activities are carried out
most efficiently, serving the interests of most citizens the best.

Privatization of pensions, for example, has proved costly in those countries that have tried
the experiment. America's mostly private health-care system is the least efficient in the world.
These are hard questions, but it is easy to show that selling state-owned assets at low prices
is not a good way to improve long-run financial strength.

All of the suffering in Europe – inflicted in the service of a man-made artifice, the euro –
is even more tragic for being unnecessary. Though the evidence that austerity is not working
continues to mount, Germany and the other hawks have doubled down on it, betting Europe's future
on a long-discredited theory. Why provide economists with more facts to prove the point?

Joseph E. Stiglitz is a Nobel laureate in economics and University Professor at Columbia University.

Sandwichman :

According to Krugman "Madrick is able to claim that Say's Law is pervasive in mainstream
economics only by lumping it together with a number of other concepts that, correct or not,
are actually quite different." Krugman asks: "But is this 'mainstream economics'?"

Well, yes and no. Not literally or in Keynes's "supply creates its own demand" caricature. But
Nassau W. Senior reformulated Say's argument (which wasn't presented by Say as a law) in terms
of a "first fundamental proposition" that he described as a law with the same universality and
certainty as the law of gravity in physics.

It might not sound like "supply creates its own demand" on first hearing but Senior deduces
the same conclusion of an impossibility of a general glut from it. Senior's proposition
IS widely taken for granted or propounded in mainstream economics. It states :

"That every man is desirous to obtain, with as little sacrifice as possible, as much
as possible of the articles of wealth."

One might even detect an affinity with Lionel Robbins's definition of economics as "the science
which studies human behavior as a relationship between ends and scarce means which have alternative
uses." In a word, it's the maximization principle.

In "Expectation and Rational Conduct" (1937) Terence Hutchison argued that Senior's first
fundamental proposition shared "one remarkable characteristic" with "almost all" formulations
of the utilitarian maximization doctrine: "they appear further to postulate, and only are applicable
if the further postulate is made, that all expectations are perfectly correct." In these formulations,
uncertainty is relegated to an ambiguous ceteris paribus alibi which makes the utilitarian calculus
immune from criticism.

No. 2 on Madrick's bad idea list is Say's Law, which states that savings are automatically invested,
so that there cannot be an overall shortfall in demand. A further implication of Say's Law is
that government stimulus can never do any good, because deficit spending by the public sector
will always crowd out an equal amount of private spending.

But is this "mainstream economics"? Madrick cites two University of Chicago professors, Casey
Mulligan and John Cochrane, who did indeed echo Say's Law when arguing against the Obama stimulus.
But these economists were outliers within the profession. Chicago's own business school regularly
polls a representative sample of influential economists for their views on policy issues; when
it asked whether the Obama stimulus had reduced the unemployment rate, 92 percent of the respondents
said that it had. Madrick is able to claim that Say's Law is pervasive in mainstream economics
only by lumping it together with a number of other concepts that, correct or not, are actually
quite different....

-- Paul Krugman

Sandwichman -> anne:

Say's Law DOESN'T state that savings are automatically invested. It both assumes it and implies
it, though -- because it is a tautology it implies what it assumes. Say stated that every product
brought to the market opens up a market for (other) goods to the full extent of its value.

anne -> Sandwichman:

"A further implication of Say's Law is that government stimulus can never do any good, because
deficit spending by the public sector will always crowd out an equal amount of private spending."

-- Paul Krugman

[ This is the passage that I mean to argue against. ]

Main Street Muse :

The devotion some economists have for idealistic visions like "the invisible hand," etc.
is appalling.

And some still trot out that failed BS called "trickle down" - despite the fact that evidence
has never supported the trickle down theory.

But who needs facts when ideology trumps all? At least that's how it seems when looking at practitioners
of that dismal science.

The New Classical
Clique:
Simon
Wren-Lewis thinks some more about macroeconomics gone astray;
Robert
J. Waldmann weighs in. For those new to this conversation, the question is why starting
in the 1970s much of academic macroeconomics was taken over by a school of thought that began
by denying any useful role for policies to raise demand in a slump, and eventually coalesced
around denial that the demand side of the economy has any role in causing slumps.

I was a grad student and then an assistant professor as this was happening, albeit doing international
economics – and international macro went in a different direction, for reasons I'll get to in
a bit. So I have some sense of what was really going on. And while both Wren-Lewis and Waldmann
hit on most of the main points, neither I think gets at the important role of personal self-interest.
New classical macro was and still is many things – an ideological bludgeon against liberals,
a showcase for fancy math, a haven for people who want some kind of intellectual purity in a
messy world. But it's also a self-promoting clique. ...

MaxSpeak:

Regarding Waldmann's remark about the ideological proclivities of, among others, Martin Feldstein,
at the recent NBER meetings in D.C. he presented a paper on reducing tax expenditures to lower
the deficit, wherein no tax expenditure favoring saving or investment fell to his axe. When
someone in the audience mentioned that tax expenditures for saving probably reduced saving more
than increased it (since the cost to the Gov exceeds the marginal effect on saving), he professed
ignorance of whether or not that is true. (It is.)

bakho :

In the 70s models were started in a lot of fields in addition to economics including biology,
environmental science, ecology. In part it looks to have been physics envy. But the physicists
made models of systems that were far more simple than economics. Modelers in the 70s went to
work using computers that filled whole rooms but had less computing power than my laptop. By
necessity they had to make assumptions that made the models crude predictors. But computing
power was increasing and the optimists believed that eventually it would be possible to model
such complex systems as economics using micro foundations, a lifetimes work.............. Not.
Micro founded models make about as much sense as building a weather model based on individual
atoms. Computers still are not there yet and may never be. The modelers of the 70s were overoptimistic
about what they could deliver and buffaloed many people into thinking they were hot stuff. It
was an exclusive club with higher math skills required as a ticket to admission. It is most
difficult to cut losses on sunk costs, but that is their legacy.

Rather than detailed models that provide insights to the minutiae of economies, models have
many short cuts and assumptions that assume as givens what might be important insights. They
assumed the economy of the time: Full employment and supply limited. The models of the 70s fell
apart with the 80s recession but regained their footing after the recovery and great moderation
when the economy was in a sweet spot that required little action for the Fed. Thus the models
had several decades to coast along without major fail. We hit an economy that was demand limited
and high unemployment. The things many models simply assumed away were the very problems that
needed addressing.

The 70s models belong on the dust heap of history in the company of many failed models in other
disciplines that have long since been abandoned. As the Nobel Laureate Max Planck noted, "Science
advances one funeral at a time."

bakho -> bakho...

SWL wonders why Keynes was dismissed in the 70s.

Very wealthy special interests disliked Keynes, disliked the New Deal and spent some of their
money to support academics and intellectuals that could dismiss Keynes or show that his policies
were in error. They funded people to work on the project of undermining Keynes and still do.
Wealthy elites were eager to support economists to work on economics projects that denounced
Keynes. Researchers of all striped try to keep their patrons happy. If refutation of Keynes
was the price demanded in order to build up a computer based economics from micro foundations
so be it. Keynes wasn't needed for micro foundations. Keynes was an impediment to funding. It
is not surprising that Keynes was jettisoned. When micro foundations sputtered, there was too
much crow to be eaten. Better to double down than die of embarrassment.

Submitted by
George Washington
on 01/31/2014 19:16 -0500
We've previously noted that General Electric should be held partially responsible for the Fukushima
reactor because
General Electric knew that its reactors were unsafe:

5 of the 6 nuclear reactors at Fukushima are General Electric Mark 1 reactors.

Thirty-five years ago, Dale G. Bridenbaugh and two of his colleagues at General Electric
resigned from their jobs after becoming increasingly convinced that the nuclear reactor
design they were reviewing — the Mark 1 — was so flawed it could lead to a devastating
accident.

Questions persisted for decades about the ability of the Mark 1 to handle the
immense pressures that would result if the reactor lost cooling power, and today
that design is being put to the ultimate test in Japan. Five of the six reactors at the
Fukushima Daiichi plant, which has been wracked since Friday's earthquake with explosions
and radiation leaks, are Mark 1s.

"The problems we identified in 1975 were that, in doing the design of the containment,
they did not take into account the dynamic loads that could be experienced with a loss of
coolant," Bridenbaugh told ABC News in an interview. "The impact loads the containment would
receive by this very rapid release of energy could tear the containment apart and
create an uncontrolled release."

***

Still, concerns about the Mark 1 design have resurfaced occasionally in the years since
Bridenbaugh came forward. In 1986, for instance, Harold Denton, then the director
of NRC's Office of Nuclear Reactor Regulation, spoke critically about the design
during an industry conference.

"I don't have the same warm feeling about GE containment that I do about the larger
dry containments," he said, according to a report at the time that was referenced Tuesday
in The Washington Post.

"There is a wide spectrum of ability to cope with severe accidents at GE plants," Denton
said. "And I urge you to think seriously about the ability to cope with such an event if
it occurred at your plant."

***

When asked if [the remedial measures performed on the Fukushima reactors by GE before
2011] was sufficient, he paused. "What I would say is, the Mark 1 is still a little
more susceptible to an accident that would result in a loss of containment."

The New York Times
reported that other government officials warned about the dangers inherent in GE's Mark
1 design:

In 1972, Stephen H. Hanauer, then a safety official with the Atomic
Energy Commission, recommended that the Mark 1 system be discontinued because it presented
unacceptable safety risks. Among the concerns cited was the smaller containment design,
which was more susceptible to explosion and rupture from a buildup in hydrogen — a
situation that may have unfolded at the Fukushima Daiichi plant. Later that same year,
Joseph Hendrie, who would later become chairman of the Nuclear Regulatory Commission,
a successor agency to the atomic commission, said the idea of a ban on such systems
was attractive. But the technology had been so widely accepted by the industry
and regulatory officials, he said, that "reversal of this hallowed policy, particularly
at this time, could well be the end of nuclear power."

A particular feature of the 40-year old General Electric Mark 1 Boiling Water Reactor
model – such as the six reactors at the Fukushima site – is that each reactor has a separate
spent-fuel pool. These sit near the top of each reactor and adjacent to it ….

Former Babcock-Hitachi engineer Mitsuhiko Tanaka said in a
Greenpeace video about a
flawed reactor vessel Hitachi made for Fukushima: "when the stakes are
raised to such a height, a company will not choose what is safe and legal. Even if it is dangerous
they will choose to save the company from destruction."

Investigative reporter Greg Palast also
notes that Toshiba was one of the main designers of the failed diesel generators which failed
during the earthquake and tsunami ... and that the generator design was faulty.

A 1,400-person lawsuit has just been filed to hold GE – as well as 2 other companies responsible
for Fukushima reactor construction, Toshiba and Hitachi – responsible.

About 1,400 people filed a joint lawsuit Thursday against three companies that manufactured
reactors at Japan's Fukushima Dai-ichi nuclear plant ….

The 1,415 plaintiffs, including 38 Fukushima residents and 357 people from outside Japan,
said the manufacturers — Toshiba, GE and Hitachi — failed to make needed safety improvements
to the four decade-old reactors at the Fukushima plant ….

They are seeking compensation of 100 yen ($1) each, saying their main goal is to raise awareness
of the problem.

Postscript: If these companies are not held accountable, they will
do it again and
again. For example, the Department of Justice
announced earlier
this month:

General Electric Hitachi Nuclear Energy Americas LLC (GE Hitachi) has agreed to pay $2.7
million to resolve allegations under the False Claims Act that it made false statements
and claims to the Department of Energy and the Nuclear Regulatory Commission (NRC)
concerning an advanced nuclear reactor design. GE Hitachi, a provider of nuclear energy
products and services headquartered in Wilmington, N.C., is a subsidiary of General Electric
Company (GE) that is also partially owned by Hitachi Ltd., a multinational engineering and manufacturing
firm headquartered in Tokyo, Japan. GE is headquartered in Fairfield, Conn.

***

The government alleged that GE Hitachi concealed known flaws in its steam dryer analysis
and falsely represented that it had properly analyzed the steam dryer in accordance with applicable
standards and had verified the accuracy of its modeling using reliable data.

...The truth is that the Neoclassical paradigm is a fraud. The Neoclassical paradigm's dominance
of the tertiary Economics syllabus is a monumental scandal. Perennial dissent in the discipline
has perennially been marginalised, crushed or colonised. Ergas here is merely embodying a long tradition
of the Inquisition against heresy. Neoclassical economics is not the Queen of the Social Sciences,
but a religion.

Ironically, the hegemony of Neoclassical economics is not primarily for ideological reasons.
Neoclassical economic theory has a loose relationship with but is distinct from the politically
influential neoliberal ideology. Both are rooted in a priori axioms, for which evidence is
irrelevant. The latter, self-sufficient, appeals to vested interests and those seeking simple catechisms
for a complex world.

Neoclassical economics is hegemonic predominantly for reasons of attractive analytical technique
— grownups playing games with each other. Another school of thought, Austrian economics, is more
transparently aligned to a pro-unrestrained capitalist ideology, but it remains marginalised or
non-existent in the conventional syllabus.

Neoclassical economics is centred on a pure theory (or theories) of the market mechanism. But
the theories do not explicate real-world markets. Bizarrely, a tertiary economics education serves
not to explicitly articulate (and possibly defend) the character of the capitalist system but to
obfuscate its character by ignoring it.

The vacuum that is created in terms of understanding wage labour and the labour 'market' is particularly
pernicious. It is for this reason that distinct Departments of Industrial Relations were gradually
established in universities after World War II, only to now have the vacuum recreated as those Departments
are refashioned under the rubric of 'Human Relations Management'.

Thus economics graduates (save for exposure to optional and disappearing courses in history/institutions/empirics)
come out professionally ill-equipped to work in fields which presume substantive training under
the label. Learning on the job and self-education have to fill the cavernous hole, but perennially
a socialised ignorance remains.

In 12 years, like was the case with JFK assassination, the complex interplay of political forces
which could benefit from the event gradually started to come to the surface. As well as related pressure
on the researchers. For example a scientist who formerly worked for NIST has reported that the investigation
has been "fully hijacked from the scientific into the political realm," with the result that scientists
working for NIST "lost [their] scientific independence, and became little more than 'hired guns.'"11

With regard to the question of science: Far from being supported by good science, NIST's report
repeatedly makes its case by resorting to scientific fraud.

Before going into details, let me point out that, if NIST did engage in fraudulent science, this
would not be particularly surprising. NIST is an agency of the US Department of Commerce.
During the years it was writing its World Trade Center reports, therefore, it was an agency of the
Bush-Cheney administration. In 2004, the Union of Concerned Scientists put out a document charging
this administration with "distortion of scientific knowledge for partisan political ends." By the
end of the Bush administration, this document had been signed by over 15,000 scientists, including
52 Nobel Laureates and 63 recipients of the National Medal of Science. [10]

Moreover, a scientist who formerly worked for NIST has reported that it has been "fully hijacked
from the scientific into the political realm," with the result that scientists working for NIST
"lost [their] scientific independence, and became little more than 'hired guns.'"11

Referring in particular to NIST's work on the World Trade Center, he said everything had to be
approved by the Department of Commerce, the National Security Agency, and the Office of Management
and Budget—"an arm of the Executive Office of the President," which "had a policy person specifically
delegated to provide oversight on [NIST's] work." [12]

One of the general principles of scientific work is that its conclusions must not be dictated
by nonscientific concerns – in other words, by any concern other than that of discovering the truth.
This former NIST employee's statement gives us reason to suspect that NIST, while preparing
its report on WTC 7, would have been functioning as a political, not a scientific, agency. The amount
of fraud in this report suggests that this was indeed the case.

According to the National Science Foundation, the major types of scientific fraud are fabrication,
falsification, and plagiarism. There is no sign that NIST is guilty of plagiarism, but it is certainly
guilty of fabrication, which can be defined as "making up results," and falsification, which means
either "changing or omitting data." [13]

The omission of evidence by NIST is so massive, in fact, that I treat it as a distinct type of
scientific fraud. As philosopher Alfred North Whitehead said in his 1925 book, Science and the Modern
World: "It is easy enough to find a [self-consistent] theory . . . , provided that you are content
to disregard half your evidence." The "moral temper required for the pursuit of truth," he added,
includes "[a]n unflinching determination to take the whole evidence into account." [14]

NIST, however, seemed to manifest an unflinching determination to disregard half of the relevant
evidence.

The efforts by the financial players, the interviews show, are part of a sweeping campaign to beat
back regulation and shape policies that affect the prices that people around the world pay for essentials
like food, fuel and cotton... Underwriting researchers and academic institutions is one part of Wall
Street's efforts to fend off regulation.

Signs of the energy business are inescapable in and around Houston — the pipelines, refineries
and tankers that crowd the harbor, and the gleaming office towers where oil companies and energy
traders have transformed the skyline.

And in a squat glass building on the
University of Houston campus, a measure of the industry's pre-eminence can also be found in
the person of
Craig Pirrong, a professor of finance, who sits at the nexus of commerce and academia.

As energy companies and traders have reaped fortunes by buying and selling oil and other commodities
during the recent boom in the commodity markets, Mr. Pirrong has positioned himself as the hard-nosed
defender of financial speculators — the combative, occasionally acerbic academic authority to call
upon when difficult questions arise in Congress and elsewhere about the multitrillion-dollar global
commodities trade.

Do financial speculators and commodity index funds drive up prices of oil and other essentials,
ultimately costing consumers? Since 2006, Mr. Pirrong has written a flurry of influential letters
to federal agencies arguing that the answer to that question is an emphatic no. He has testified
before Congress to that effect, hosted seminars with traders and government regulators, and given
countless interviews for financial publications absolving Wall Street speculation of any appreciable
role in the price spikes.

What Mr. Pirrong has routinely left out of most of his public pronouncements in favor of speculation
is that he has reaped financial benefits from speculators and some of the largest players in the
commodities business, The New York Times has found.

While his university's financial ties to speculators have been the subject of scrutiny by the
news media and others, it was not until last month, after repeated requests by The Times under the
Freedom of Information Act, that the University of Houston, a public institution, insisted that
Mr. Pirrong submit disclosure forms that shed some light on those financial ties.

Governments and regulatory agencies in the United States and Europe have been gradually moving
to restrict speculation by major banks. The Federal Reserve, concerned about the risks, is reviewing
whether it should tighten regulations and limit the activities of banks in the commodities world.

But interviews with dozens of academics and traders, and a review of hundreds of emails and other
documents involving two highly visible professors in the commodities field — Mr. Pirrong and Professor
Scott H. Irwin at the University
of Illinois — show how major players on Wall Street and elsewhere have been aggressive in underwriting
and promoting academic work.

The efforts by the financial players, the interviews show, are part of a sweeping campaign to
beat back regulation and shape policies that affect the prices that people around the world pay
for essentials like food, fuel and cotton.

Professors Pirrong and Irwin say that industry backing did not color their opinions.

Mr. Pirrong's research was cited extensively by the plaintiffs in a lawsuit filed by Wall Street
interests in 2011 that for two years has blocked the limits on speculation that had been approved
by Congress as part of the Dodd-Frank financial reform law. During that same time period, Mr. Pirrong
has worked as a paid research consultant for one of the lead plaintiffs in the case, the International
Swaps and Derivatives Association, according to his disclosure form.

While he customarily identifies himself solely as an academic, Mr. Pirrong has been compensated
in the last several years by the
Chicago Mercantile Exchange, the commodities trading house Trafigura, the Royal Bank of Scotland,
and a handful of companies that speculate in energy, according to the disclosure forms.

The disclosure forms do not require Mr. Pirrong to reveal how much money he made from his consulting
work, and a university spokesman said that the university believed it was strengthened by the financial
support it received from the business community. When asked about the financial benefits of his
outside activities, Mr. Pirrong replied, "That's between me and the I.R.S."

Debating to a Stalemate

No one disputes that a substantial portion of price increases in oil and food over the last decade
were caused by fundamental market factors: increased demand from China and other industrializing
countries, extreme weather, currency fluctuations and the diversion of grain to biofuel.

But so much speculative money poured into markets — from $13 billion in 2003 to $317 billion
at a peak in 2008 — that many economists, and even some commodities traders and investment banks,
say the flood became a factor of its own in distorting prices.

Others assert that commodities markets have historically gone through intermittent price bubbles
and that the most recent gyrations were not caused by the influx of speculative money. Mr. Pirrong
has also argued that the huge inflow of Wall Street money may actually lower costs by decreasing
what commodities producers pay to manage their risk.

Mr. Pirrong and the University of Houston are not alone in publicly defending speculation while
accepting financial help from speculators. Other researchers have received funding or paid consulting
jobs courtesy of major commodities traders including AIG Financial Products, banks including the
Royal Bank of Canada or financial industry groups like the Futures Industry Association.

One of the most widely quoted defenders of speculation in agricultural markets, Mr. Irwin of
the
University of Illinois, Urbana-Champaign, consults for a business that serves hedge funds, investment
banks and other commodities speculators, according to information received by The Times under the
Freedom of Information Act. The business school at the University of Illinois has received more
than a million dollars in donations from the Chicago Mercantile Exchange and several major commodities
traders, to pay for scholarships and classes and to build a laboratory that resembles a trading
floor at the commodities market.

Mr. Irwin, the University of Illinois and the Chicago exchange all say that his research is not
related to the financial support.

Underwriting researchers and academic institutions is one part of Wall Street's efforts to fend
off regulation.

The industry has also spent millions on lobbyists and lawyers to promote its views in Congress
and with government regulators. Major financial companies have also funded magazines and websites
to promote academics with friendly points of view. When two studies commissioned by the Commodity
Futures Trading Commission, the financial regulatory agency, raised questions about the possible
drawbacks of speculation and of
high-frequency trading, lawyers for the Chicago exchange wrote a letter of complaint, saying
that its members' proprietary trading information was at risk of disclosure, and the research program
was shut down.

The result of the various Wall Street efforts has been a policy stalemate that has allowed intensive
speculation in commodities to continue despite growing concern that it may harm consumers and, for
example, worsen food shortages. After a two-year legal delay, the futures trading commission this
month introduced plans for new limits on speculation. Some European banks have stopped speculating
in food, fearing it might contribute to worldwide hunger.

Mr. Pirrong, Mr. Irwin and other scholars say that financial considerations have not influenced
their work. In some cases they have gone against the industry's interests. They also say that other
researchers with no known financial ties to the industry have also raised doubts about any link
involving speculation and soaring prices.

But ethics experts say that when academics fail to disclose financial ties, they do a disservice
to the public and undermine the perception of impartiality.

"If those that are creating the culture around
financial regulation also have a significant, if hidden, conflict of interest, our public is
not likely to be well served," said Gerald Epstein, an economics professor at the University of
Massachusetts, Amherst, who in 2010 released a study about conflicts of interest among academics
who advised the federal government after the financial crisis.

Speculation in the Market

Financial ties among professors promoting speculation and the banks and trading firms that profit
from it date back to the beginning of the recent commodities boom, which got an intellectual kick-start
from academia.

After Congress and the Clinton administration deregulated the commodities markets in 2000, and
the Securities and Exchange Commission lowered capital requirements on investment banks in 2004,
the financial giants began developing new funds to capitalize on the opportunity.

AIG Financial Products commissioned two highly respected Yale University professors in 2004 to
analyze the performance of commodities markets over a half-century. The professors — who prominently
acknowledged the financial support — concluded that commodities markets "work well when they are
needed most," namely when the stock and bond markets falter.

Money flowed into the commodities markets, and although the markets have cooled in the last two
years, the price of oil is now four times what it was a decade ago, and corn, wheat and soybeans
are all more than twice as expensive.

A public uproar about the rising prices became heated in the spring of 2008, as oil soared and
gas prices became an issue in the presidential campaign. Congress scheduled public hearings to explore
whether speculation had become so excessive it was distorting prices.

Financial speculators are investors who bet on price swings without any intention of taking delivery
of the physical commodity. They can help smooth the volatility of the market by adding capital,
spreading risk and offering buyers and sellers a kind of price insurance. But an assortment of studies
by academics, congressional committees and consumer advocate groups had found evidence suggesting
that the wave of speculation that accelerated in 2003 had at times overwhelmed the market.

Financial speculators accounted for 30 percent of commodities markets in 2002, and 70 percent
in 2008. As gasoline topped $4 a gallon in the summer of 2008, Congress tried to soothe angry motorists
by pushing for restrictions on oil speculation.

Mr. Pirrong jumped into the fray. He wrote papers, blog posts and
opinion pieces
for publications like The Wall Street Journal, calling the concern about speculation "a witch hunt."

Mr. Pirrong also testified before the House of Representatives in 2008 and, identifying himself
as an academic who had worked for commodities exchanges a decade earlier, he warned that congressional
plans to rein in speculators would only make matters worse.

"Indeed, such policies are likely to harm U.S. consumers and producers," he said. When oil company
executives, traders and investment banks cited speculation as a major cause of surging prices which,
by some estimates, was costing American consumers more than $300 billion a year, Mr. Pirrong dutifully
contradicted them.

Mr. Pirrong's profile grew as he sat on advisory panels and hosted conferences with senior executives
from the trading world as well as top federal regulators. Last year, Blythe Masters, head of commodity
trading at JPMorgan Chase, approached him to write a report for a global bank lobbying group, the
Global Financial Markets Association.

The report was completed in July 2012, but the association declined to release it. Mr. Pirrong
said it was because he had reached the conclusion that banks should be regulated more heavily than
other commodity traders. "I wouldn't change the call, so they sat on the report," he wrote on his
blog, The Streetwise Professor.

What Mr. Pirrong did not reveal in his public statements about the report is that he had financial
ties to both sides of that debate: the commodities traders as well as the banks. Ms. Masters declined
to comment. Over the years, Mr. Pirrong has resisted releasing details of his own financial dealings
with speculators, and when The Times first requested his disclosure forms in March, the University
of Houston said that none were required of him. The disclosure forms Mr. Pirrong ultimately filed
in November indicate that since 2011, he has been paid for outside work involving 11 different clients.
Some fees are for his work as an expert witness, testifying in court cases on behalf of the Chicago
Mercantile Exchange and a bank and a company that makes futures-trading software. The commodities
firm Trafigura contracted him to conduct a research project.

Mr. Pirrong is also a member of the advisory board for TruMarx Partners, a company that sells
software to energy traders, a position that entitles him to a stock option package.

It was reported in The Nation magazine
in November that the University of Houston's Global Energy Management Institute, where Mr. Pirrong
serves as a director, has also received funding from the Chicago exchange, as well as financial
institutions that profit from speculation, including Citibank and Bank of America.

On his blog, Mr. Pirrong has dismissed suggestions that his work for a school that trains future
oil industry executives creates a conflict of interest.

"Uhm, no, dipstick," he wrote in 2011, replying to a reader who had questioned his objectivity.
"I call 'em like I see 'em." In a telephone interview last week, Mr. Pirrong said that his consulting
work gave him insight into the kind of real-world case studies that improve his research and teaching.
"My compensation doesn't depend on my conclusions," he said.

When asked about Mr. Pirrong's disclosure, Richard Bonnin, a university spokesman said only that
all employees were given annual training on the school's policy, which requires researchers to report
paid outside consultant work.

Professors as Pitchmen

Concerns about academic conflicts of interest have become a major issue among business professors
and economists since the financial crisis. In 2010, the documentary "Inside Job" blasted a handful
of prominent academic economists who did not reveal Wall Street's financial backing of studies which,
in some cases, extolled the virtues of financially unsound assets. Two years later, the American
Economic Association adopted tougher disclosure rules.

Even with the guidelines, however, financial firms have been able to use the resources and credibility
of academia to shape the political debate.

The Chicago Mercantile Exchange and the University of Illinois at Urbana-Champaign, for example,
at times blur the line between research and public relations.

The exchange's public relations staff has helped Mr. Irwin shop his pro-speculation essays to
newspaper op-ed pages, according to emails reviewed by The Times. His studies, writings, videotaped
speeches and interviews have been displayed on the exchange's website and its online magazine.

In June 2009, when a Senate subcommittee released a report about speculation in the wheat market
that raised concerns about new regulations, executives at the Chicago exchange turned to Mr. Irwin
and his University of Illinois colleagues to come up with a response.

Dr. Paul Ellinger, department head of agriculture and consumer economics, said, "The interactions
that have occurred here are common among researchers."

A spokesman for the exchange said that Mr. Irwin was just one of a "large and growing pool of
esteemed academics, governmental editors and editors in the mainstream press" whose work it follows
and posts on its various publications. While the C.M.E. has given more than $1.4 million to the
University of Illinois since 2008, most has gone to the business school and none to the School of
Agriculture and Consumer Economics, where Mr. Irwin teaches. And when Mr. Irwin asked the exchange's
foundation for $25,000 several years ago to sponsor a website he runs to inform farmers about agricultural
conditions and regulations, his request was denied.

Still, some of Mr. Irwin's recent research has been funded by major players in the commodities
world. Last year, he was paid $50,000 as a consultant for Gresham Investment Management in Chicago,
which manages $16 billion and runs its own commodities index fund. He noted Gresham's sponsorship
in the paper and on his disclosure form, and said it gave him the opportunity to use new data and
test new hypotheses.

Mr. Irwin also works for a business called Yieldcast that caters to agricultural producers, investments
banks and other speculators, selling them predictions of corn and soybean yields. Mr. Irwin has
said he does not consider it a conflict because he works only with the mathematical forecasting
models and never consults with clients.

"The debate about financialization is primarily about the large index funds, none of whom are
clients," he said.

Mr. Irwin declined to provide a list of his clients, and the university said its disclosure requirements
did not compel him to do so.

This article has been revised to reflect the following correction:

Correction: December 31, 2013

An article on Saturday about financial rewards from Wall Street to academic experts whose
research supports the financial community's views on commodity trading misidentified a Canadian
bank and commodities trader that financed the work of academic researchers or paid consultants.
It is the Royal Bank of Canada, not the Bank of Canada, which is that nation's central bank.
The article also rendered incorrectly the university affiliation of Scott H. Irwin, a prominent
defender of speculation in agricultural markets. He is a professor at the University of Illinois
at Urbana-Champaign — not Champaign-Urbana. And a picture caption with the continuation of the
article misidentified the subject of one of several pictures. The lower right photograph showed
the atrium of the University of Illinois's business school — not its Market Information Lab,
which was shown behind Professor Irwin in the photograph at the left.

Four missing ingredients in macroeconomic models: It is refreshing to see top academics
questioning some of the assumptions that economists have been using in their models.
Krugman,
Brad DeLong and many others are opening a methodological debate about what constitute an
acceptable economic model and how to validate its predictions. The role of micro foundations,
the existence of a natural state towards the economy gravitates,... are all very interesting
debates that tend to be ignored (or assumed away) in academic research.

I would like to go
further and add a few items to their list... In random order:

1. The business cycle is not symmetric. ... Interestingly, it was Milton Friedman who put
forward the "plucking" model of business cycles as an alternative to the notion that fluctuations
are symmetric. In Friedman's model output can only be below potential or maximum. If we were
to rely on asymmetric models of the business cycle, our views on potential output and the natural
rate of unemployment would be radically different. We would not be rewriting history to claim
that in 2007 GDP was above potential in most OECD economies and we would not be arguing that
the natural unemployment rate in Southern Europe is very close to its actual.

2. ...most academic research is produced around models where small and frequent shocks drive
economic fluctuations, as opposed to large and infrequent events. The disconnect comes probably
from the fact that it is so much easier to write models with small and frequent shocks than
having to define a (stochastic?) process for large events. It gets even worse if one thinks
that recessions are caused by the dynamics generated during expansions. Most economic models
rely on unexpected events to generate crisis, and not on the internal dynamics that precede
the crisis.

[A little bit of self-promotion: my
paper
with Ilian Mihov on the shape and length of recoveries presents some evidence in favor of
these two hypothesis.]

3. There has to be more than price rigidity. ...

4. The notion that co-ordination across economic agents matters to explain the dynamics of
business cycles receives very limited attention in academic research. ...

I am aware that they are plenty of papers that deal with these four issues, some of them
published in the best academic journals. But most of these papers are not mainstream. Most economists
are sympathetic to these assumption but avoid writing papers using them because they are afraid
they will be told that their assumptions are ad-hoc and that the model does not have enough
micro foundations (for the best criticism of this argument, read the latest post of
Simon Wren-Lewis). Time for a change?

"Krugman, Brad DeLong and many others are opening a methodological debate about what constitute
an acceptable economic model and how to validate its predictions." -M. Thoma

The major problem is right here. Predictions as a theory evaluation criterion is misguided,
ideological bunk. As long as neoclassical economists are focused on predictions, they are free
to avoid analyzing capitalism as it really exists.

The main topic for scientific economics is EXPLAINING the normal, profitable operation
of capitalism and why it breaks down. Neoclassical economists will never uncover the truth about
capitalism as long as they utilize models whose exact relationship to capitalist reality is
at best unknown and at worst absurd. That is, as long as they focus on predictions instead of
explanations they are engaged in a apologetics and not science.

Dan

4. The notion that co-ordination across economic agents matters to explain the dynamics of
business cycles receives very limited attention in academic research. ...

YES!!!!
And who exactly does the coordinating? well, families of course, and managers and owners and
corporations - with in whatever rules and societal norms exist - AND the Government.

The Government is a central component of a modern economy including and centrally as
a coordinating agent on behalf of all the little agents. The Reagan revolution solved the
70s by throwing out government - who will save us from the 00s and increase effective coordination???

Also, can we just through out the idea of equilibrium? It's not all bad, but somehow I have
a strong suspicion that Econ would be better off without it.

DrDick

I think he is really on target with the issue of the systematic connection between the dynamics
of booms and the following crisis, as well as the stochastic elements in the business cycle.
Both seem well supported by the observed patterns over the past 40 years. I also think far too
little attention has been given to economic collusion, despite the fact the Adam Smith observed
that it is near universal among capital.

bakho

One of the keys to recession is the change in velocity. In the last recession we saw great
increase in the money supply reflected in decreases in velocity. Models that considered velocity
nearly constant failed.

We all know what distorting incentives have done to finance and banking. The incentives my colleagues
face are not huge bonuses, but the professional rewards that accompany publication in prestigious
journals – chiefly Nature, Cell and Science.

These luxury journals are supposed to be the epitome of quality, publishing only the best research.
Because funding and appointment panels often use place of publication as a proxy for quality of
science, appearing in these titles often leads to grants and professorships. But the big journals'
reputations are only partly warranted. While they publish many outstanding papers, they do not publish
only outstanding papers. Neither are they the only publishers of outstanding research.

These journals aggressively curate their brands, in ways more conducive to selling subscriptions
than to stimulating the most important research. Like fashion designers who create limited-edition
handbags or suits, they know scarcity stokes demand, so they artificially restrict the number of
papers they accept. The exclusive brands are then marketed with a gimmick called "impact factor"
– a score for each journal, measuring the number of times its papers are cited by subsequent research.
Better papers, the theory goes, are cited more often, so better journals boast higher scores. Yet
it is a deeply flawed measure, pursuing which has become an end in itself – and is as damaging to
science as the bonus culture is to banking.

It is common, and encouraged by many journals, for research to be judged by the impact factor of
the journal that publishes it. But as a journal's score is an average, it says little about the
quality of any individual piece of research. What is more, citation is sometimes, but not always,
linked to quality. A paper can become highly cited because it is good science – or because it is
eye-catching, provocative or wrong. Luxury-journal editors know this, so they accept papers that
will make waves because they explore sexy subjects or make challenging claims. This influences the
science that scientists do. It builds bubbles in fashionable fields where researchers can make the
bold claims these journals want, while discouraging other important work, such as replication studies.

In extreme cases, the lure of the luxury journal can encourage the cutting of corners, and contribute
to the escalating number of papers that are retracted as flawed or fraudulent. Science alone has
recently retracted high-profile papers reporting cloned human embryos, links between littering and
violence, and the genetic profiles of centenarians. Perhaps worse, it has not retracted claims that
a microbe is able to use arsenic in its DNA instead of phosphorus, despite overwhelming scientific
criticism.

There is a better way, through the new breed of open-access journals that are free for anybody to
read, and have no expensive subscriptions to promote. Born on the web, they can accept all papers
that meet quality standards, with no artificial caps. Many are edited by working scientists, who
can assess the worth of papers without regard for citations. As I know from my editorship of eLife,
an open access journal funded by the Wellcome Trust, the Howard Hughes Medical Institute and the
Max Planck Society, they are publishing world-class science every week.

I'm sure I've mentioned this before, but Ben Goldacre's book "Bad Science" is an interesting
and relevant readhttp://www.badscience.net/

In the early days of the EFQM
http://www.efqm.org/en/tabid/132/default.aspx
I believe they did some research that showed how the Dunning-Kruger effect inflated self assessment
scores from less mature organisations to a level that would be a major achievement for a world class
organisation.

On an adjacent post, someone remarked that economics wasn't a science. This isn't true. The
problem is that too many of the people practicing economics (including most of the mainstream
... present company excepted) aren't scientists, and are only doing so because monied interests
are paying their way to be in the way.

Pseudoscience is a term commonly applied to any body of knowledge, methodology,
or practice that is portrayed as
scientific but diverges
substantially from the required standards for scientific work or is unsupported by scientific research.[1]
(See Scientific
method.)

The term "pseudoscience" generally has
negative connotations
because it asserts that things so labeled are inaccurately or deceptively described as science.
As such, those labeled as practicing or advocating a "pseudoscience" almost always reject this classification.

Mark Thoma lists a bunch of reasons why this might be the case (boldface mine):

•The cranks have always been there, but today digital technology makes it easier to gain
a platform.
•The stakes are higher, so winning is the only thing.
•Scientists have pushed too far and offered evidence as though it were fact, only to have
to reverse themselves later (e.g. types of food that are harmful/helpful) eroding trust.
•Science education is so bad that the typical reporter has no idea how to tell fact from
"manufactured doubt," and the resulting he said, she said journalism leaves the impression
that both sides have a valid point.
•Scientists became too arrogant and self-important to interact with the lowly public, and
it has cost them.
•The political sphere has become ever more polarized and insular making it much
easier for false ideas intended to promote political or economic gain to reverberate within
the groups.
•Nothing has really changed, old people always think their age was the golden one.

I would argue the widespread acceptance of racism–I mean the flat-out, stone cold kind, not
subtle prejudice–for much of the twentieth century has to be one of the dumbest displays of
denialism. And it was certainly tied into notions of self-identity ("If you ain't better than
a…, then who are you better than?"). So the oldsters, like Tolstoy's unhappy families, were
stupid in their own ways.

But I want to return to the notion of a marketplace of ideas. I dislike that metaphor because
it implies ideas are judged not on their validity, but on how well they are marketed. The implication
of this is that once some rich wacko decides to fund a 'faith-tank', that entity essentially
becomes a Self-Perpetuating Bullshit Machine, and is unstoppable. It's relatively cheap to 'put
ideas out there.' More importantly, there's no way to stop them from doing so, nor do the individual
actors pushing these ideas have any incentive to stop.

One more way we have commodified the previously uncommodifiable*.

*Or least to a recently unprecedented extent.

kievite:

The key problem IMHO is that the science became political.

And well organized minority with money can dictate the political discourse to the less organized
majority. That's how societies are organized (Iron law of oligarchy).

That means that well financed cranks employed in think tanks by elite for particular (often
nefarious) purposes are now the feature not an aberration. They are an integral part of the
modern social landscape.

Remember Academician Trofim Lysenko who pioneered the use a totalitarian state to suppress
all research in genetics for almost three decades(1935-1965). Looks like his methods found a
lot of talented followers in the West ;-)

Now we have Lysenkoism as a mainstream phenomenon. In other words parts of the science are
now organized like high demand cult.

beezer:

The Grand Old Party has fallen prey to a boatload of goofy economic ideas and become
the Goofy Old Party. Trickle down, giving rich people tax cuts makes money for everyone
else, rising tide lifts all boats (everyone has boats? who knew?), firing people creates more
jobs, cutting pay and benefits increases spending and demand, closing voting locations in poor
areas increases voting election integrity. But it gets worse, goofy ideas crowd out good ideas.

Romneycare works but the Goofy party has become so goofy it opposed it's own plan in Obamacare.
Government spending is all waste. Goofy. So we can't have infrastructure spending that would
create good jobs for millions of Americans. Goofy crowds out good. Government R&D is wasteful.
Goofy. State funded R&D was the primary innovation force for the past 50 years: Internet, chip
technology, Siri, touch screen, and pretty much everything Apple sells, nanotechnology, biotechnology,
the algorithm that created Google--the list is almost comprehensive. Goofy crowds out good.
But money talks louder than anything else, it seems. And if goofy is what's needed to get that
big money happy, then it's goofy we get. From the Goofy Old Party.

jrossi:

I think the biggest factor is the internet giving fools and knaves a huge megaphone. That
combined with confusion and distraction go a long way towards explaining this.

As regards science confusion, science is too hard. Only nerds are interested.

Dave:

"But I want to return to the notion of a marketplace of ideas. I dislike that metaphor
because it implies ideas are judged not on their validity, but on how well they are marketed."

You might not like it, but can you explain how that isn't an accurate depiction of reality?
When faced with the kind of decisions that ordinary people cannot possibly understand, they
will tend to choose the better marketing so long as it comes from people that seem to be experts.

For example, if you, an economist, are trying to decide between 2 different personal computer
purchases, how do you go about doing it? I doubt you carefully weigh the pros and cons of various
RAM sockets and SSD hard drives, but instead talk to someone who you trust who seems like s/he
knows what that all means. And the thing is, because you aren't an expert, you can't know if
that expert is lying to you.

The same phenomenon happens to most people on matters of public policy. If all the apparent
experts you're exposed to are saying global warming is a myth cooked up by Al Gore to convince
America to give up their freedom, then you're going to believe it.

grizzled:

The world has become complicated enough that no one can master the facts of more than one
or two of a number of technically complicated but highly significant issues.

For instance, consider the question of whether waste material from nuclear power can be disposed
of safely. I believe it can solely on the basis of an NSF study, which is the best information
I know of. I am totally unable to evaluate the question myself.

Studies of the psychology of denialism have identified the choice of who qualifies as an
expert to be a crucial variable. People tend to choose those who give answers that fit the rest
of their world view. Present company excepted, of course.

But the only alternative to relying on experts is to be an expert, and this is impossible.

bakho:

Some of these goofy ideas turn out to be good investments. Millions of Rubes will pay top
dollar to see statues of Adam and Eve next to the dinosaurs. WTF/

Glen:

Unfortunately we seem to be unable to convince the rest of the world to be science deniers.

Just another reason our economy is being shipped overseas.

Bill Tozier:

Has nobody ever read John Dewey on the importance of habit in psychology? Because yes, of
course, and I'm pretty sure he even said why, and how to go about changing it.

And the missing link was: http://books.google.com/books?id=sx74ybdAJ8IC

Dismalist :

Well, another market failure! OK, let's abolish the market in ideas. Expression only with
Genehmigung. By whom?

grizzled

" I dislike that metaphor because it implies ideas are judged not on their validity, but
on how well they are marketed."

The people who first used this metaphor cheerfully assumed that high quality wins in the
marketplace, at least eventually.

Is economics a science or a religion? Its practitioners like to think of it as akin to the former.
The blind faith with which many do so suggests it has become too much like the latter, with potentially
dire consequences for the real people the discipline is intended to help.

The idea of economics as religion harks back to at
least 2001, when economist Robert Nelson published a
book on the subject. Nelson argued that the policy advice economists draw from their theories
is never "value-neutral" but foists their values, dressed up to look like objective science, on
the rest of us.

Take, for example, free trade. In judging its desirability, economists weigh projected costs
and benefits, an approach that superficially seems objective. Yet economists decide what enters
the analysis and what gets ignored. Such things as savings in wages or transport lend themselves
easily to measurement in monetary terms, while others, such as the social disruption of a community,
do not. The mathematical calculations give the analysis a scientific wrapping, even when the content
is just an expression of values.

Similar biases influence policy considerations on everything from labor laws to climate change.
As Nelson put it, "the priesthood of a modern secular religion of economic progress" has pushed
a narrow vision of economic "efficiency," wholly undeterred by a history of disastrous outcomes.

Rational Responses

The economic zeal reached its peak several years back, when a number of economists openly
celebrated what they called economic imperialism -- the notion that the inherent superiority of
their way of thinking would lead it to displace all other social sciences. Academics sought
to bring the advanced calculus of rationality -- with its assumption that everything can be explained
by people's perfectly rational responses to incentives -- to the primitives in fields ranging from
sociology to anthropology.

The imperial adventure lost much of its momentum in the wake of the 2008 financial crisis.
More attention has turned to the psychological, or behavioral, revolution, which has established
that the rational ideal of economic theory isn't even a good starting point as a crude caricature
of the way real people act. We're often goal-oriented, of course, but we seek those goals through
imperfect heuristic rules and trial and error, learning as we go. If anything, rationality is the
anomaly in human life.

Of equal significance is a growing acceptance of
Nelson's larger point: that economics is riddled with hidden value judgments that make its advice
far from scientific. In one notable development, the Journal of Economic Perspectives published
a paper by economists
Daron Acemoglu and James Robinson that examines how value judgments -- in this case, the dismissal
of political repercussions -- have undermined well-intentioned economic interventions.

Most economists, for instance, see the weakening of trade unions in the U.S. and other Western
nations in the past few decades as a good thing, because unions' monopoly power over wages impairs
companies' ability to adapt to the demands of the market. As Acemoglu and Robinson point out,
however, unions do a lot more than influence the supply and cost of labor. In particular, they have
historically played a prominent role in creating and supporting democracy, in limiting the political
power of corporations, and in mitigating income inequality.

Narrow policy analyses have repeatedly led economists
to push for policies that have had unexpected consequences for the balance of political power.
Acemoglu and Robinson cite the push to privatize industries in
Russia in the 1990s. The idea
was that private ownership, no matter how it came about, would ultimately benefit the entire economy.
In practice, a rigged process gave rise to an illegitimate oligarchy and an increase in inequality
that set the stage for the ascendance of President Vladimir Putin's authoritarian regime.

Tragic Flaw

More recently, the gospel of economic efficiency helped lay the groundwork for the financial
crisis, mostly by encouraging overconfidence in the wonders of financial engineering. Theory-induced
dreams of market discipline provided justification for stripping away entirely sensible regulations,
such as barriers between commercial and investment banking, and for avoiding oversight of the booming
trade in derivatives. One result was an extremely wealthy financial lobby that is still working
hard to block reform.

In all these cases, the tragic flaw lies in the heady
confidence that comes with a one-size-fits-all theoretical framework. There's a real danger in seeing
economics as an objective science from which all values have been stripped. Nelson preferred an
older, more modest perspective on economics espoused by Frank Knight, a founder of the University
of Chicago's free-market school of thought. Knight
expressed the view that truly careful social and economic analysis emphasizes the limits
to human knowledge and "the fatuousness of over-sanguine expectations" from economic-policy
designs, including those favoring free enterprise.

In short, economists would do well to derive their prescriptions from observations of how the
world really works, with a healthy respect for its complexity. Faith is no substitute for informed
inquiry.

(Mark Buchanan, a theoretical physicist and the author of "Forecast: What Physics, Meteorology
and the Natural Sciences Can Teach Us About Economics," is a Bloomberg View columnist.)

To contact the writer of this article: Mark Buchanan at buchanan.mark@gmail.com

Republican/Dominionist Science in an Era of Burgeoning Totalitarianism, June 20, 2013

Chris Mooney's book reviews some aspects of what he called in its time "the Bush administration's
war on science," and he was right. To please a constituency located on the far right of the
political spectrum that usually abuses the Christian religion to impose their views on a plural
and democratic society, Mr Bush and his allies simply denied science and the results of scientific
studies that did not flatter their partisanship. So, where do we go now? The book, maybe, gives
an idea that should be developed; Chris Mooney describes the Bush administration as the
first post-modern, post-scientific administration. The author is kind enough to write that
the Bush administration did not understand the scientific process.

Frankly, I concluded after the reading of this book that the partisanship of the Bush era,
the misinterpretations, the unscientific attacks against the rights of women and gays (among
other minorities), were simply premeditated acts to satisfy the totalitarian agenda of the Christian
Dominionists (and of some really rich persons who put their interests first, ignoring what science
dictates for the preservation of humankind).

My present writing leads me naturally to the present time, with its abuses of privacy that
some whistle-blowers proved that the Bush administration began... Considering the degree of
technological discoveries that have been made by military and military sponsored researchers,
will we some day add a missing part to the scientific puzzle that Chris Mooney begins to put
together in this book, although his posterior writings rather try to describe the conservative
mind?

Whatever, when I was a child I was told that Nazi science was abominable, and I laughed at
communist science. Today, what could we say of the "Republican Science"?

I've been psyched about the release of this book for months now, and it doesn't disappoint.
Far from it: this is an unbelievably thorough, balanced, and well-researched study of a phenomenon
that ALL Americans need to be concerned about, no matter what their political stripes are. While
the title may mislead you into thinking that this is a partisan book, Mooney's dedication here
is to the integrity of the scientific research process, and not at all to politics. Indeed,
his argument is that the politicization of the scientific research process is bad no matter
which party does it, but that the Bush Administration and the current incarnation of the Republican
Party is particularly culpable of abusing science for partisan gain. Indeed, Mooney heaps praise
on the Nixon administration science policies, which were much better than what we have under
the current president.

Read this book. It's leaps and bounds better than any other political book out today- Coulter
AND Franken included.

Mooney does a good job at meticulously showing the politicization of science by both sides,
but as the title shows, he refuses to make the common journalistic mistake of imposing "false
balance" where it is not warranted. Just as you wouldn't say, "people differ on roundness of
the Earth", Mooney has the courage and the wherewithall to call a spade a spade - and he doesn't
ask you to take his word for it.

The facts are here for anyone with eyes to see. The "perfect storm" of anti-regulatory conservatives
and fundamentalist Christians have combined to wage a unified war against science with a vengeance
that the disorganized "frankenfood" liberals can only dream of.

Mooney's objective, scientific approach to making his case only makes his partisan conclusions
that much more compelling and impossible to deny. In this war of reason vs. ideology, Mooney
plants himself firmly on the side of reason, while always being fair. After reading his book,
anyone who values science and critical thinking will do the same.

That oft-quoted statement from Carl Sagan captures the essence of the scientific approach to
knowledge. Before an idea can achieve the revered status of "theory," it must survive round
after round of skeptical criticism.

Evolution, for example, has withstood nearly 150 years of challenges. With minor modifications
to Darwin's seminal ideas, it has become perhaps the most robust theory in all of science.

Religious fundamentalists, who oppose that theory as well as abortion and embryonic stem
cell research, are major combatants in what journalist Chris Mooney describes in his new book
as The Republican War on Science. Allied with them is a force of neo-conservative soldiers who
resist the conclusions of environmental research, especially about global climate change.

Yet neither religion nor business is fundamentally opposed to science. Probably a majority of
American scientists guide their lives by faith in a Creator, but they do not consider their
houses of worship as observatories or laboratories in which to test the existence of a deity.
And most modern businesses rely on science and technology to make a profit.

Thus most readers of this book, including liberal Democrats, will consider Mr. Mooney's brash
thesis extraordinary. Though they may view it an interesting model of what is happening in American
politics today, they will demand extraordinary research before declaring it a viable theory.

Indeed, the evidence supporting the existence of a partisan War on Science will never measure
up to the Sagan criterion. The most the author can hope for is that open-minded people will
consider his ideas compelling. In that, he has succeeded admirably.

By the time readers finish this book they will understand who the opponents of science are and
how they have taken control of the Republican Party. The Party's rightist base has adopted positions
that are antithetical to science, not because they oppose science per se but because government
policies suggested by the scientific consensus threaten their religious beliefs, their economic
status, or their societal influence.

Readers will also see the very effective political strategy that this alliance has evolved:
to redefine science, to undermine science, and to misconstrue science even to the point of dismissing
scientific consensus in favor of increasingly discredited fringe ideas.

The United States may not be embroiled in a war on science, but that phrase describes a useful
model for understanding the dangers of the current administration's antiscientific tactics to
our nation's future and its character. For that Republicans and Democrats, scientists and people
of faith should be grateful to Chris Mooney.

The Pew Forum on Religion and Public Life has published an updated study entitled Lobbying for
the Faithful: Religious Advocacy Groups in Washington, D.C. According to the study, as of May 2012.
there are some 200 organizations engaged in "religious lobbying" and they address about 300 different
issues and causes. 18% of them are described as "evangelical Christian" which have a particular
interest in "bioethics and life issues." These include stem cell research and the teaching of evolution.

It is difficult to know the exact numbers these special interests collectively represent. We
do know that some 22% of Americans identify themselves as fundamentalist Christians.[1] In terms
of a media presence, Pat Robertson's 700 Club, a fundamentalist Christian media effort which started
in 1961 and is still broadcasting, is the longest running program on TV and has millions of viewers
worldwide.[2] There can be no doubt that when well organized and directed, this constituency represents
a politically powerful force. Here are two examples of how they use their influence.

... ... ...

The LA Times had been moved to its florid description of the issue by the actions of President
George W Bush. 2001 was the first year of Bush's presidency, and being a fundamentalist Christian
he had instituted prayer sessions and bible study in the White House. Therefore, it came as no surprise
that one of Bush's first major actions was to try to devise a policy toward federal funding of embryonic
stem cell research that would meet most of the objections of his Christian compatriots while not
totally alienating the medical research community. His compromise was to allow funding on self-reproducing
embryonic stem cell lines that the research community had already brought into existence. That is
lines of cells created from embryos already destroyed or, as Bush put it, where "the life and death
decision has already been made." There would be no federal funding for research on any new embryonic
stem cell lines.

In 2005, Congress (more liberal then than it is today) tried to broadened Bush's executive order
and passed a Stem Cell Enhancement Act permitting federal funding to support stem cell research
using embryos bound for disposal by fertility clinics with the written consent of the donor. However,
the fundamentalist Christian interest groups objected and President Bush vetoed the bill the day
after it was passed. Congress tried again in 2007 and passed the same legislation adding instructions
to the National Institute of Health (NIH) to investigate alternative forms of stem cell sourcing.
Again President Bush vetoed the bill. This standoff lasted until 2009 when a newly elected President
Barak Obama issued his own executive order lifting restrictions on the federal funding of embryonic
stem cell research and the number self-reproducing stem cell lines available to researches quickly
grew.

What this story tells us is that there exists in the United States significant numbers of fundamentalist
Christians for whom certain lines of scientific inquiry, including stem cell research, are ideologically
anathema. As Dr. Ray Bohlin, author of The Natural Limits of Biological Change, has put it, the
embryos from which stem cells are harvested are "of infinite value to God. We are not going to redeem
them by killing them for research."[4] Such Christians are politically well organized and thus,
under certain circumstances, able to shape government policy to fit their outlook.

... ... ...

In a democracy like the United States people can believe what they wish as long as their beliefs
do not lead to criminal behavior. And, it is within that environment of democratic freedom that
fundamentalist Christians have chosen to organize themselves for an effort to forbade the teaching
of scientifically based evolution in the public school system, or alternatively, to require the
teaching of their bible based version of creation as a valid alternative alongside evolution.

This effort has been on-going since the end of World War I. At that time the scientific theory
of evolution was incorrectly thought to have been one of the motivators of the German monarchy's
decision to go to war. This, along with their fundamentalist reading of the bible, led some famous
and influential American Christian leaders, such as Williams Jennings Bryan, to crusade against
evolution. The result was that, in the 1920s, several states passed laws making it illegal to teach
the fact of human evolution. This in turn led to the famous Scopes trial in Tennessee in 1925. Scopes
was a biology teacher who was prosecuted under such a law in a trial that became a national media
event. Paralleling the legislative effort against teaching evolution in the classroom was public
pressure that led the major textbook publishers to leave evolution out of their texts until the
1960s.

The major organizations presently involved in this anti-evolution effort are the non-profit Discovery
Institute based in Seattle which budgets about $1 million a year to push the notion of intelligent
design; the Creation Studies Institute in Florida; Answers in Genesis in Kentucky; and Liberty University
in Virginia. A stereotypical motivation for all of this was given by the Southern Baptist Minister
Terry Fox who, referring to the effort of the Kansas State Board of Education to allow the teaching
of alternatives to evolution, declared that "most people in Kansas don't think we came from monkeys"
(a notion that evolution does not put forth). Fox is correct in that a large majority of Americans
believe that God created human beings. Of course, the fact that a majority of people believe something
(for instance, that the sun revolves around the earth which itself stands motionless in the heavens)
does not mean that it is true.

The laws against teaching evolution in the public schools eventually ran afoul of court decisions
which labeled them violations of the separation of church and state. This turn of events has
motivated fundamentalist Christians to create the notion of "scientific creationism" and later "intelligent
design." Claiming that these concepts are not derived from religious belief, they have campaigned
for them to be taught in the schools as equally valid ideas alongside evolution. All such efforts
have been found unconstitutional by the courts and therefore blocked. This has led to resentment
and an increased enrollment in Christian schools. As one fundamentalist mother who pulled her children
out of public school rather curiously put it, "if students only have one thing to consider, one
option, that's really more brainwashing."[5]

More importantly, prior to (and also following) all the court decisions against the Christian
position, fundamentalists were successful in passing their demands into law in a large number of
state legislatures. Indeed, as of 2012, twenty six states have on-going legislative challenges to
the teaching of evolution.

As Aristotle rightly noted, one swallow does not make a summer. But I use this little personal
story for some more general points I want to make about science and democracy, or more particularly
– for I consider this to be true of much of the Steiner output – pseudo-science and democracy.
Let me lay out what seem to me to be some pretty basic points.

First, if democracy means anything then it means letting people have some pretty silly thoughts
(Mill 1859). Of course, what counts as "pretty silly" is a comparative term, but that is no
big issue. Even if you are a minority of one in thinking something pretty silly, you are still
obligated to let others have them. While I find the idea of turning water into wine a very
attractive prospect, I don't think it is true, and moreover I think anyone who believes this has
a pretty silly belief. I am fully aware that most people in the part of the world where I
live would not agree, but whether I am a minority of one or a majority faced with but one believer,
I should not prevent that person from having those beliefs. I take it for granted that what
I am saying is hedged with the usual caveats. Personally I find the idea of sex with young
children rather silly – rather disgusting actually – but I take it that for the obvious reasons
(exploitation and so forth) the tolerance I am expressing does not apply here. I shall have
more to say shortly about the boundaries of tolerance.

Second, pretty silliness is not entirely a subjective matter. Let's leave religion on one
side (because that is not the topic now) and turn to the realm of the empirical, the world of science.
I take it that down through the centuries philosophers and others interested in the nature of
science have managed to articulate a fairly robust set of criteria for distinguishing between genuine
science and false or bogus or pseudo-science. At the risk of seeming intolerably self-serving,
but pointing out that they were accepted in a court of law – in an anti-Creationism trial in Arkansas
in 1981 — let me give you the criteria that I favor for real science.

I take it that Darwin's theory of evolution through natural selection fits these sorts of criteria
(Ruse 2006). It appeals to law – both natural selection and the laws of genetics (formerly
Mendelian and now molecular). It can be tested. For instance, one can run models to
see how efficiently an ant nest uses its resources and then check your results against actual nests.
It is always open to revision – is it selection working here or just random factors (genetic drift)?
And sometimes it is seen to be false or at least potentially so. The newly discovered little
human-like creature, Homo floriensis (nicknamed the "hobbit") might turn out just to be a
diseased, regular Homo sapiens, and not a new species at all.

I take it that something like so-called Creation Science that supposes that Genesis is literally
true does not satisfy these criteria. It appeals to miracles – God created Adam and Eve.
It is certainly not testable nor are its conclusions tentative. Nothing would persuade
its enthusiasts that Noah's Flood was not literally true. And it is certainly not falsifiable.
How could it be? It is based on the Word of God.

Third, I take it that tolerance about people's beliefs does not extend to letting this sort of
stuff be taught in science classrooms in state-supported schools. I am not sure that I would
go as far as Richard Dawkins (2007) as to say that all forms of religious education are just excuses
for child abuse. Although I am not comfortable with many of these things, I don't think I
would want to close down private schools that taught what I (and others) regard as pseudo-science.
But there are good reasons for preferring regular science over pseudo-science, not the least being
that the former works and the latter does not. I want children taught the best that we have,
not any odd idea because someone is sincere about it. Put the matter this way. In medical
schools would you want equal time given over to Christian Science and the Jehovah's Witnesses on
blood transfusions and the anthroposophists on vaccinations? I want children taught
what works. I certainly do not want children – or medical students – taught things that are
positively false and potentially very harmful. (I am leaving on one side constitutional questions.
In the USA, Creation Science cannot be taught in state schools because it violates the separation
of Church and State as mandated by the First Ammendment. Here I am trying to make a more general,
philosophical argument, not win a court case.)

Fourth and finally, let me draw your attention to the fact that pseudo-science rarely comes without
a philosophy attached (Ruse 2013). It stands to reason in a way. There has to be something
driving people to go out into the wilderness beyond respectability. In the case of anthroposophy,
it is a vision of human nature, one bound up with astral forces as we develop and try to respond
to the unseen. It is deeply holistic, seeing the whole of nature including humans as part
of one integrated whole. This is all very much in the spirit of Romanticism seeing all as
one. Wordsworth expressed it well in his poem Tintern Abbey.

And I have felt
A presence that disturbs me with the joy
Of elevated thoughts; a sense sublime
Of something far more deeply interfused,
Whose dwelling is the light of setting suns,
And the round ocean, and the living air,
And the blue sky, and in the mind of man,
A motion and a spirit, that impels
All thinking things, all objects of all thought,
And rolls through all things.

Ultimately of course it all goes back to Plato and his theory of forms, with the Good standing
above and integrating all things. Anthroposophists are not above suggesting that Rudolf Steiner
is Plato reincarnated. Since apparently we alternate sexes in our incarnations, one wonders
who was the woman in the middle. One presumes that the Virgin Mary was not an option.

In the case of Creation Science, obviously there is (what I would consider) the somewhat
distorted version of Christianity that carries with it those values that lie near and dear to the
hearts of American evangelicals (Ruse 2005). To be candid, I doubt anyone has ever really
worried about gaps in the fossil record. But they do worry about abortion on demand and gay
marriage and the abolition of the death penalty and (very much) feminism. (They worry a lot
less about divorce perhaps because the evangelical record in this respect is truly dreadful – undoubtedly
in major part a function of people marrying far too young in order to enjoy the delights of connubial
bliss and to avoid the snare of fornication.[i])

Tolerance

Now, I think that tolerance demands that one accept the views of others in this respect,
meaning that they have a perfect right to hold them, although frankly I am not sure that the other
side would reciprocate. (I suspect that the value of letting others have their values
is one of the values at issue here.) But it doesn't mean that I have to accept them in a quiescent
sort of way or have no right to argue against them or to try politically to prevent their ideas
and values prevailing. I can do everything in my ability to block them – as indeed I personally
have done for the past thirty years with respect to all forms of Creationism.

Democracy is a precious thing and there are always forces trying to prevent it or to circumscribe
it – in our own society particularly, when you think of the grotesque gerrymandering that goes on
when drawing up congressional districts or the absurd qualifications that are demanded before one
is allowed to vote. It is a nice balance between recognizing that democracy means that others
can believe and do what one finds offensive – pretty silly, as I have said – and making sure that
no one abuses that right to try to stop you holding ideas that they find offensive – pretty silly.
Remembering also that democracy does not mean that every idea deserves a level playing field.
We have the right and the obligation to judge ideas in the light of past experience and if they
fail the test then they should be so judged.

None of this sounds very easy, but whoever said that the important things are easy?

This is a special message for evangelical rednecks ;-)

Posted by samzenpuson Thursday March 21, @10:25PM
from the you-don't-look-a-day-over-13-billion dept.

skade88 writes "Reuters is reporting that scientists now say
the universe is 100 million years older than previously thought after they took a closer look
at leftover radiation from the Big Bang. This puts the age of the Universe at 13.8 billion years.
The new findings are the direct results from analyzing data provided by the European Space Agency's
Planck spacecraft.

The spacecraft is providing the most detailed look to date at the remnant
microwave radiation that permeates the universe. 'It's as if we've gone from a standard television
to a high-definition television. New and important details have become crystal clear,' Paul Hertz,
NASA's director of astrophysics, told reporters on a conference call."

Barack Obama is a cynical opportunist who serves the interests of wealth and privilege and whose
policies more effectively promote those interests than Mitt Romney and Paul Ryan could ever hope to.

Mitt Romney's Vice Presidential pick, Paul Ryan, as with himself, is an uninformed opportunist
who was born into wealth and privilege and whose proposed policies aim to perpetuate that privilege
at the expense of the rest of the population with whom he nominally shares a national identity.
Barack Obama is a cynical opportunist who serves the interests of wealth and privilege and whose
policies more effectively promote those interests than Mitt Romney and Paul Ryan could ever hope
to.

Those circling the wagons to get Mr. Obama re-elected should spend a bit of time getting to know
their guy.

... ... ...

In his effort to save particular culpable bankers while leaving the banking system corrupt, fragile,
predatory and dysfunctional, Mr. Obama spared the victims of banker malfeasance no inconvenience,
misdirection, unnecessary effort or cost. As part of the bank 'bailouts' Treasury Secretary Timothy
Geithner developed an entire program (HAMP– Home Affordable Modification Program) (link) to intentionally
dupe hundreds of thousands of homeowners facing foreclosure into wasting a year or more of their
lives 'negotiating' with banks that had no intention of modifying mortgages. The result was to inflict
economic, legal and moral harm onto already distressed citizens solely to benefit the banks. That
Mr. Geithner could have accomplished the same goal by fiat without torturing the already victimized
citizenry illustrates what utter contempt he and Mr. Obama have for the American people.

... ... ...

After several decades of the Washington political establishment opportunistically trotting out
the 'budget deficit' canard in the lull between launching expensive wars for the benefit of their
corporate benefactors, creating expensive giveaways to connected industries (Pharma) and enacting
exorbitant tax cuts for the ascendant plutocracy, Barack Obama upped the ante by laying Social Security
and Medicare on the table to be sacrificed without even the pretense of having been forced to do
so. The only likely reason why he didn't beat Paul Ryan to the punch in trying to privatize Social
Security, as Bill Clinton had wanted to do, is that the matter polled poorly following George W.
Bush's bungling of the matter.

... ... ...

In every dimension as president Barack Obama has proven himself a loyal servant of the
global ruling class—bankers, corporate CEOs and oil and gas industry executives, against the rest
of humanity. And through his faux-populist rhetoric and crude-materialist presence (black
Democrat) he has been able to promote ruling class interests more effectively than conspicuous
aristocrats like Mitt Romney could hope to. More to the point, as a trained technocrat,
Mr. Obama can avoid the overreach of crude ideologues like Paul Ryan by knowing exactly who his
benefactors are. (Mr. Ryan would hit a brick wall thirty seconds into trying to cut the government
programs that the ruling class feeds off of. Mr. Obama will stick to de-funding only those who lack
social power).

Finally, my condolences to Mr. Obama's supporters on the coming disappointments should he be
re-elected. Sure Mitt Romney and Paul Ryan would be 'worse.' But should Mr. Romney win there would
be less delusion around whose interests any president will serve. The ruling class declared war
on the rest of us forty years ago. Mitt Romney clearly represents the ruling class. Mr. Obama does
the same with less evident intent.

... Wall Street strategists view this state and local budget squeeze as a godsend. As Rahm Emanuel
has put matters, a crisis is too good an opportunity to waste – and the fiscal crisis gives creditors
financial leverage to push through anti-labor policies and privatization grabs. The ground is being
prepared for a neoliberal "cure": cutting back pensions and health care, defaulting on pension promises
to labor, and selling off the public sector, letting the new proprietors to put up tollbooths on
everything from roads to schools. The new term of the moment is "rent extraction."

After eight years of cowboy globalism under George W Bush, Americans went for the "smart power"
pledged by Barack Obama - resurrecting US prestige overseas, using diplomacy first and violence
as a last resort. That was the promise; the reality has been different, with enemies even angrier
and friends becoming foes.

Pavlina Tcherneva makes separate observations about the key
advisors in Romney's camp and how well their ideas have fared in our depression-in-the-making.

She also makes sure to include Gary Becker, and with good
reason. Becker was among the speakers at a keynote session at the Milken Conference in 2008 which
I attended. It was the first time
I'd seen toads hop out of someone's mouth when speaking.

By Pavlina
Tcherneva, Assistant Professor of Economics at Franklin and Marshall College, Research Scholar at
The Levy Economics Institute, and Senior Research Associate at the Center for Full Employment and
Price Stability. Cross posted from New Economic Perspectives

Presidential hopeful Mitt Romney boasts support from the scientific
community for his supply-side trickle-down economic proposal. It is outlined
here, along with the
list of economists endorsing the plan.

Several Nobel Prize winners grace the top of the list. Here
is a quick look at some of these luminaries and their contributions to some of the most pressing
problems of our time.

UNEMPLOYMENT: Robert
Lucas

Perhaps no one bears more responsibility for the general apathy
among mainstream economists towards the problem of unemployment than Robert Lucas. He is the economist
who argued
that there was no point in distinguishing between voluntary and involuntary unemployment because
agents were 'perfectly rational' and the jobless essentially 'chose' their condition (1978, 242).
(Yes, according to Lucas, even during
the Great
Depression, 25% of the
working population opted for leisure rather than work!) This is not some minor claim, but a signature
argument by Lucas and the entire New Classical School of economic thought to which he belongs. This
is the school whose second core assumption — that of 'continuous market clearing' — together with
the 'rational expectations hypothesis' has been used to render the condition of involuntary unemployment
a virtual impossibility.

Why spend any effort looking for solutions to a problem which
has been assumed away?

THE DOWNTURN: Edward
Prescott

Edward Prescott is a prominent member of the Real
Business Cycle School
(a spin-off of the New Classical School), which also embraces the assumptions of continuous market
clearing and rational expectations. Prescott and his colleague Kydland shared the Nobel Prize for
"their contributions to dynamic macroeconomics". They are the brainpower behind the most dominant
mainstream macroeconomic model—the Dynamic Stochastic General Equilibrium model. Yes, this is the
same model that failed to predict the latest crisis and prompted the Queen of England
to ask "Why didn't anyone see it coming?" This same DSGE model has no money, no default, no
financial institutions, no debt… in other words, nothing of interest to those who are interested
in the real world. Prescott too
subscribes
to the idea that the unemployed are simply substituting leisure for work during business cycles
and that the government shouldn't do anything about it. Indeed, all that the government safety-nets
do is introduce moral hazard (as in, unemployment insurance removes the incentive to look for work).
Prescott further
maintains
that if flood protection were not offered, rational agents would stop living in flood- and hurricane-prone
regions.

Surely those troublesome food stamps that go to 47 million
Americans disincentivize them from foraging.

THE EUROPEAN MONETARY
UNION: Robert Mundell

Robert Mundell is the father of the
signature
theory (Optimal Currency Areas) that rationalized the design of the European Monetary Union.
Under the OCA model, there is no reason for currencies to be connected to nation states. Indeed
Mundell claimed that single currency areas would increase economic performance and efficiency. We
all know how well this experiment turned out and even the mainstream today recognizes the need for
nation states to control their own currencies for the purposes of policy making. The best analysis
of the OCA model can be found in Charles Goodhart's seminal article "The
two concepts of money: implications for the analysis of optimal currency areas", which is a
required reading for anyone interested in MMT or wanting to understand why Europe is in such a mess.

FINANCIAL INSTABILITY:
Myron Scholes

Myron Scholes (along with his collaborator Robert Merton)
shared the Nobel for "developing a new method for valuing derivatives". This method gave birth to
the trading model used by Long Term Capital Management in the 90s. Remember LTCM? The hedge fund
that almost brought the financial system to its knees in 1998 were it not for the Fed-orchestrated
bailout. 10 years later derivatives trading managed to finish the job and produce a far bigger crisis.
Scholes himself
was accused
by LTCH vs. US of using illegal tax shelters to hide profits
from the hedge fund.

No, these are not some obscure economists pushing some obscure
ideas. These are the men whose work has defined much of the mainstream economics profession and
provided the 'rationale' for supply-side, trickle-down economic policy.

These are men whose ideas have stood the test of time and
have failed. What can we expect from the economic plan of a man who has their support?

============

A bonus: Gary Becker

(Though Becker's contributions do not bear direct relevance
to the current crisis, it is emblematic of the warped logic used by many mainstream economists.)

Gary Becker is the economist who developed
a pricing model for kidneys and other human organs. Since efficient markets solve all problems—economic
or social—monetizing organ donation, in this economist's view, makes perfect sense. He is better
known for his theory on human capital investment. One extension of this work deals with the question
of child-rearing. According to Becker, parents choose to have children because they fear that their
retirement portfolios are inadequate to support them in their old age…hence, the kids. Some parents
opt to have a few "high-quality kids", while others – many "low quality kids",
depending
on the family's time preference. I am not joking and these
are not my words; they are
his. This theory has given birth to the "rotten-kid theorem", which says that because of these
financial incentives, parents are "altruistic" even (even?!) towards their spoiled-rotten and selfish
kids, because they are essentially trying to maximize their own return. In sum, according to Becker,
all social, economic, environmental, health, and other problems can be solved if all human activity
is monetized and financial incentives are 'properly aligned'.

(As I suspect every other rational parent has done, I too
have been crunching numbers since I had my daughter 2 months ago. Would she yield the return I'm
expecting of her or should I increase my contributions to my retirement portfolio? Ah, where is
that perfect information when you need it!?)

Harvard historian Niall Ferguson ran into an online buzzsaw this week. He
says the "liberal blogosphere" was out to do him in, and that was part of it. But there's something
bigger at work: a groundswell of resentment for and frustration with the "thought leaders" who craft
our conventional wisdom, get paid big speaking fees for it, yet often behave in ways that don't
accord with this status. First
Jonah Lehrer, then
Fareed Zakaria, now this — and surely there will be more such brouhahas to come. It may be that
this groundswell is driven entirely by frustrated would-be speechmaking thought leaders. But I think
it's more than that (then again, as a
would-be speechmaking
thought leader, I would).

What got Ferguson — whom I know, although not well, and like — in trouble was his Newsweek
cover story "Hit
the Road, Barack." The article looks like something a smart, busy guy who really likes Paul
Ryan, kind of dislikes the President, and loves to tweak the American liberal establishment — but
hasn't had much time to delve into the issues lately — might throw off in a couple of days while
vacationing on Martha's Vineyard. It's not good, but it's not exactly an abomination, either.

So why the firestorm of criticism? A lot of it had to do with one little passage about the Affordable
Care Act, otherwise known as Obamacare:

The president pledged that health-care reform would not add a cent to the deficit. But the CBO
and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the
ACA will have a net cost of close to $1.2 trillion over the 2012-22 period.

What Ferguson left out is that the Congressional Budget Office also said that other provisions
of the law (reductions in Medicare spending and increases in taxes) will more than make up for that
cost, resulting in a net reduction in the deficit. His wording was clearly misleading: Obama's "health-care
reform" included both the insurance-coverage provisions and the other provisions. When Princeton
economist and frequent Ferguson sparring partner Paul Krugman
pointed this out, Ferguson could have easily said something like Oops, I worded that poorly.
But the point stands that increasing health coverage is going to cost a lot. Instead, he
doubled down and argued that because he'd written "insurance-cost provisions" he'd been entirely
correct. Along the way, he again selectively quoted from the CBO in a way that
completely misrepresented the meaning of the passage he cited. Which was when the piling on
really began.

Some of it was clearly partisan: I have tried and failed to imagine a situation where a sloppy
pro-Obama or anti-Romney screed by a Harvard professor would have caused the Atlantic's
James Fallows to declare, "As
a Harvard Alum, I Apologize." But it was also driven by people like
Business Insider's Joe Weisenthal,
Politico's Dylan Byers, and
Slate's Dave Weigel who had no political axe to grind but were flabbergasted at Ferguson's sheer
shamelessness. These are all leading members of a rising digital media elite, closely connected
via social media, who are pretty sure their peers and readers would never let them get away with
nonsense like that.

Which is where my thought leader idea comes in. Ferguson is a great financial historian — his
history of the
Rothschild
family is brilliant. In recent years he's become more of a generalist, and has focused
more on current events. That's not a bad thing — I'm all for experts broadening their reach and
sharing their knowledge. But Ferguson has been so good at it, and can express himself so charmingly,
and
handsomely, and
swashbucklingly, that some people are willing to pay him to yammer on about pretty much anything.
Tina Brown of Newsweek/The Daily Beast is one of those people, but far more important,
as Stephen Marche
pointed out on Esquire.com, are the conference organizers who are
pay Ferguson
$50,000 to $75,000 to entertain and edify a hotel ballroom full of business types about "Chimerica"
or "the
six killer apps of Western civilization."

That's the link with Lehrer and Zakaria, who are (or probably were, in Lehrer's case)
big on the speaking circuit as well. Zakaria is a hugely accomplished thinker and writer (go back
and read his breathtakingly good October 2001 Newsweek cover story "Why
Do They Hate Us?" for a sample) who seems to have stretched himself too thin. Lehrer is a smart
young upstart — his third book,
Imagine: The Art and
Science of Creativity, had been tearing up the bestseller lists before scandal hit — who
seems to have made good storytelling a higher priority than the truth. That progression may
tell a lot. The path to lucrative thought-leaderdom blazed over the past couple of decades was to
establish yourself with dense, serious work (or a big, important job) and then move on
to catch-phrase manufacturing (I
spent a few weeks following Tom Friedman around in 2005, and learned that he had made this transition
very deliberately). Nowadays ambitious young people looking to break into the circuit often just
aim straight for the catch-phrases. Speakers bureaus need pithy sales pitches, not complex erudition
— and while speaking fees
might be spare change for Mitt Romney, for journalists and academics they often represent their
only real shot at a top-tax-bracket income.

The result is an intellectual environment that seems to increasingly reward the superficial,
and keeps rewarding those who make it into the magic circle of top-flight speakers even if they
don't have anything new or interesting to say. Or at least: a part of the intellectual
environment is like that. There's also a lively, seemingly much more meritocratic intellectual scene
in the blogosphere and on Twitter. "The growth of online venues," wrote
blogger and international relations
scholar Daniel W. Drezner
in a journal article in 2008 "has stimulated rather than retarded the quality and diversity
of public intellectuals."

Where things get combustible is when the two scenes collide — when speaker's-bureau pundits get
called out online for misdeeds, errors, or just inanities. (For a bracingly nasty recent example
of the latter, check out
think
tanker Evgeny Morozov's recent New Republic
evisceration of the TED ethos.) I don't know if this marks a changing of the guard, an uprising,
or just a bunch of Twitter chatter that we should all ignore and get back to work. But it's fair
to say that our thought leaders have as a group done a disastrously poor job of leading our thoughts
over the past decade, so some kind of shake up is in order. (I should credit futurist Eric Garland,
who
has been
making this
argument a lot lately.)

All of which means that if you're a high-profile thought leader like Niall Ferguson, or Fareed
Zakaria, or Jonah Lehrer, watch out. What got you there may not keep you there.

Update: Dan Drezner has a
great piece, posted about 20 minutes before this one, that explores the same topic.

You are very very very much too kind to Drezner. His post is fundamentally different from yours
because it contains nothing along the lines of " Along the way, he again selectively quoted
from the CBO in a way that completely misrepresented the meaning of the passage he cited. "
Drezner not only ignores this fact but asserts that Brad DeLong ignored it too. Drezner claimed
that DeLong discussed the possible revocation of Ferguson's tenure for being "tendentious"Justin
Fox (his word).

In fact, DeLong only raised the possibility when Ferguson went on to commit gross intellectual
fraud. Drezner libeled DeLong by grossly miss-representing what DeLong wrote (he must know what
DeLong wrote as he discusses it).

I really don't think you should link to Drezner again. He has demonstrated an inability )really
unwillingness( to distinguish the false and the tendentious. He seems to have no idea that historians
consider accurate quotation of primary sources important. I don't see how anyone can imagine
that Drezner has anything useful to contribute to any discussion. The same, of course, goes
for Ferguson.

Bryan Simpson

Justin, I was lead here by someone who referred to your article as a rare mature and thoughtful
look at Niall Ferguson's latest internet dust up. It is correct your write up of Ferguson is
fair, but you are a wolf in sheep's clothing. You have cut Ferguson like no one I've read. You
do everything short of putting thought leader in quotation marks, it's truly a step down for
a serious thinker to be considered a thought leader in the context you have drawn out. I too
have enjoyed some of Ferguson's histories but I can't say I now recognized the man who wrote
them. That Ferguson no longer exists. He has joined the lazy pablum pushers the like of Thomas
Friedman. The next famous "thought leader" to screw up better hope you aren't there to explain
what happened. Well done.

Guest

You state "Ferguson is a great financial historian". Does this go all the way back to 2010?
Ferguson on Bloomberg: "Well, that's not really a part of the argument I made in the piece.
The point I made in the piece was that the stimulus had a very short-term effect, which is very
clear if you look , for example, at the Federal employment numbers there's a huge spike in early
2010 and then it falls back down."

Krugman explains the spike is due to census hiring and then writes: "For what it's worth,
in this case I don't think we're looking at a blatant attempt to mislead; I suspect that we're
just looking at raw ignorance."

Justin Fox

Although intentionally misrepresenting source material, as Ferguson seems to have done in the
article and definitely did in the subsequent exchange, belongs somewhere on the same scale as
plagiarism, doesn't it? show more show less

5l5k2laa

In fact what Ferguson did is worse. Plagiarism does not intentionally mislead one's readers,
contrary to what Ferguson has done. A clarification. Plagiarism does not intentionally mislead
one's readers as to the substantive content of the writing although it does mislead as to the
source of the writing. However, to most readers whether the statement is true or false is far
more important than whose statement it is. show more show less

This systematic distortion of information makes human societies characteristically self-deceptive,
with people disposed to believe they are living up to their ideals, particularly when they are not.
The existing schematic dissonance is usually subconscious, due to the misleading nature
of words, so society stumbles smugly along while at odds with itself, its environment and its equally
stupid neighbors. In fact, the only really effective control of development comes not from inside
but from physical limitations (what cannot be done) and competition with other groups which are
also out of touch with themselves.

In general, internal criticism is of limited value as a control mechanism for growth and development
of a social system. There usually tend to be few, if any, effective critics within any organization.
When not dismissed out of hand as a crank or an outsider, anyone with valid criticism is made
an outsider, as ostracism is a common reward for honesty, accuracy and integrity. Thus, criticism
without power is largely wasted, producing little but woe for the bewildered critic himself.

Perhaps there are so few effective critics because anyone with any brains at all quickly finds
that most human organizations just are not set up for effective criticism. The basic working assumption
is that everything is just fine. Outside criticism is deflected and internal feedback is supposed
to be positive reinforcement from "Yes men" promoting their careers by corrupting the mighty. At
best, criticism has a place on the fringe, where cranks and comics can be tolerated as amusing diversions.

The resistance of organizations to criticism is inherent in the human condition. Criticism is invariably
disruptive, since group spirit, if nothing else, is disrupted when unrecognized problems are made
explicit. Such disturbances are unwelcome to those in power. While a critic may think he is performing
a service by calling attention to an obvious problem, he is often treated as if he caused it. Actually, critics should be considered society's early warning systems, sensing symptoms of problems
before

[Aug 10, 2012] Religious Fundamentalism and the Art of Motorcycle Club Maintenance by Donald Cox

August 5, 2002 | Donald Cox

Unless you belong to a motorcycle club, you probably don't think they have much to do with your
life or with the world at large. I'm going to try to convince you otherwise. The logic of motorcycle
clubs (members don't like the word "gangs") applies to many spheres, sublime and nasty, from religion
to academic pursuits to terrorism.

"Generically, then, here are two similarities between motorcycle clubs and academic
clubs:

each screens out the less zealous

and each discourages members from mingling with outsiders"

I don't expect you to be convinced right away, especially in light of some of the clubs' practices.
Consider the initiation rites of the Hells' Angels in their mid-60's ascendancy, as reported by
Hunter Thompson in his famous biker ethnography, Hell's Angels: A Strange and Terrible Saga:

Every Angel recruit comes to his initiation wearing a new pair of Levi's and a matching jacket
with the sleeves cut off and a spotless emblem on the back. The ceremony varies from one chapter
to another but the main feature is always the defiling of the initiate's new uniform. A bucket
of dung and urine will be collected during the meeting, then poured on the newcomer's head in
a solemn baptismal. Or he will take off his clothes and stand naked while the bucket of slop
is poured over them and the others stomp it in. These are his 'originals,' to be worn every
day until they rot. The Levi's are dipped in oil, then hung out to dry in the sun—or left under
the motorcycle at night to absorb the crankcase drippings. When they become too ragged to be
functional, they are worn over other, newer Levi's. Many of the jackets are so dirty that the
colors are barely visible, but they aren't discarded until they literally fall apart. The condition
of the originals is a sign of status. It takes a year or two before they get ripe enough to
make a man feel he has really made the grade. [pp. 45-46]

Now, where were we? Oh yes, academic pursuits. At the end of the first year of my studies for
a Ph.D. my 20 or so classmates and I were given two exams (the "cores") designed not so much to
test academic skills but to weed out those lacking the maniacal endurance to study economics past
the point of all reason. It worked—by the second year only a half dozen of us remained, and a couple
more dropped out before finishing the Ph.D. I wouldn't say the cores were a bucket of slop, exactly,
but they did seem to cross the line from pedagogy into hazing.

Maybe you're thinking that a closer analogy might have to do with the sartorial habits of bikers
and academic economists. While economists tend to avoid the dung-caked look, they're not exactly
snappy dressers, and their uniforms often seem no less rigid than those of bikers. But I think there
is a subtler connection. Stinky clothes prevent a biker from consorting with the non-biker world;
he can forget about being, for example, a part-time bank teller or Gap salesperson. A seemingly
crazy tradition serves a rational purpose, by making it easier for members to concentrate on the
world of motorcycles full time.

Likewise, academics are sometimes discouraged from working in the non-academic world. For example,
in the upper echelons of academe, "outside" consulting—the term itself belies boundaries—garners
little prestige for the free-lancer and, if anything, is often looked down upon by peers.
Norms against consulting serve the same purpose as non-standard clothing by making it harder for
the club members to stray from the fold.

Generically, then, here are two similarities between motorcycle clubs and academic clubs:
each screens out the less zealous and each discourages members from mingling with outsiders.

This line of thinking comes from a theory proposed by economist Laurence Iannaccone, who tried
to explain two puzzles connected with religious sects:

sacrifice, such as the burnt offerings described in the Book of Leviticus,

and stigma, such as the shaved heads of the Hare Krishnas.

The sacrifices are wasteful, and, to outsiders at least, the stigmas often appear downright weird.

Iannaccone solved these puzzles by turning the logic of the economic theory of clubs on its head.
Up to that point, economists focused mainly on how clubs might seek to prevent congestion by limiting
membership, as a golf or tennis club might. But for some clubs the problem is not preventing
congestion by keeping people out, but achieving critical mass by keeping people in. Small
motorcycle clubs risk losing a barfight; tiny choirs are not very uplifting; poorly attended seminars
are dull. The last item rationalizes the norms against consulting in academe. The less time my colleagues
spend at law firms and corporate offices, the more time they have for lectures and seminars.

But it's not just about numbers; quality matters too: fellow bikers who fight hard, choir members
who sing their hearts out, seminar participants who stay awake (and maybe even pay attention). Plus,
many clubs—the Hell's Angels included—are beehives of redistribution and mutual insurance.
In Thompson's words, "According to the code, there's no such thing as one Angel imposing on another."
(p. 173) Iannaccone argues that the sacrifice demanded of prospective members helps screen
out potential free-riders—those who might take advantage of the club's benefits without
contributing their fair share. Hence the hazing, to weed out those less than fully committed. In
the words of one Hell's Angel

"We're the one percenters, man—the one percent that don't fit and don't care....We've punched
our way out of a hundred rumbles, stayed alive with our boots and our fists. We're royalty among
motorcycle outlaws, baby." (Thompson, p. 4)

Nothing could be more different from a life of riding motorcycles than a life of studying the
Talmud. Yet, as Eli Berman's recent study of Israeli Ultra-Orthodox Jews shows, the logic of Iannaccone's
model applies with equal force to groups whose behavior it was originally formulated to explain—religious
sects. The twin concerns of screening out free riders—who might be tempted to take advantage
of redistribution—and attaining a critical mass—in order to make prayer and study more gratifying—each
apply.

On redistribution: "No sick member is without visitors, and no single member is without an arranged
match. Charity is ubiquitous, and interest-free loans abound, both in money and in kind..." (Berman,
p. 911). On critical mass: "...praying is much more satisfying the more participants there are,
especially when the tenth man arrives to make a prayer quorum (minyan)." (Berman, p. 921).

Berman also addresses a paradox: with worldwide income growth and technical progress, why
the rise in religious fundamentalism and increased stringency of fundamentalist groups?

An easy way to resolve the paradox is to return to the example of bikers. If being a bank teller
were the only alternative to participating in club activities, requiring members to wear dung-caked
jackets effectively closes off that option. But what if technology brings about a new, more accessible
alternative, such as, for example, telemarketing? The stigma from the jacket could prove useless
for thwarting temptation; a biker might be able to work out of his home. The ante would have to
be upped to something more radical (tongue piercing, maybe?).

Berman emphasizes that modern culture is an anathema to many religious sects, such as the Mennonites,
the Amish, the radical Islam, in addition to Ultra-Orthodox Jews. Iannaccone's model explains why.
TV, professional sports, Britney Spears, Ozzy Osbourne—all these compete for the attention of group
members, especially younger ones.

About three weeks into my freshman year at a Catholic high school the "disciplinarian"—a humorless,
black-robed cleric—showed up unannounced in the middle of a religion class to give an impromptu
lecture on the evils of "Beatle-ism." Beatle-ism, apparently, had mainly to do with clothing: wide
belts and pants without cuffs were deemed especially pernicious. (The rule on mandatory cuffs was
quietly rescinded when it turned out that the local clothing store lacked the inventory to supply
the entire student body.)

The root problem, of course, was that the Beatles were quite effective in competing for our attention.
(To add insult to injury, whatever enthusiasm they may have had for saying the rosary or doing trigonometry,
they kept well hidden.) But the proximate solution, as I think our disciplinarian reasoned, could
well have to do with superficial trappings like clothing and hairstyles. If regulating them could
prevent us from consorting with kids who espoused the Beatles' values, maybe we would knuckle down
to work and pray harder.

I don't mean to sound churlish, and I don't bear a grudge against Brother Marcel, the disciplinarian.
He was just following an economically rational policy. (Further, I'm eternally grateful to him and
his prohibitions on long hair, which probably prevented me from joining a rock band and forgetting
what little math I knew at the time.)

The clash between Brother Marcel and the Beatles is a microcosm of the perennial and increasingly
pressing cat-and-mouse game between the Old Guard and the New Wave. The latter is the machinery—from
places like Hollywood, New York and Cambridge, Massachusetts—that churns out new gadgets and ideas.
I think some are great (new findings in neurobiology are a personal favorite) and some are crap
(violent summer blockbuster movies). Accordingly, I feel ambivalent toward the Old Guard. If Brother
Marcel were alive today he'd probably be laboring to stanch the flow of gameboys into my high school,
something I'd be inclined to support. But I'd also be uncomfortable knowing that, as a member of
the Old Guard, he occupies a proverbial slippery slope that can lead to coercive practices of, for
example, the Taliban.

The New Wave is becoming cheaper and more accessible all the time. The Old Guard will respond
by closing ranks ever so tightly. Where it all leads depends in part on the resolution of these
mighty forces. Whether rising fundamentalism will persist in the face of the expanding reach of
secular temptation also depends on those old economic mainstays, technology, tastes and incomes.
Clearly the New Wave, with its focus groups and market surveys, pays attention to this. But as long
as club participation remains voluntary, the Old Guard will have to pay attention as well.

I must confess I'm rooting for the New Wave. In hindsight, I would have preferred spending more
time listening to Mitch Ryder and the Detroit Wheels, and less time studying the Baltimore Catechism.
But it's a tricky call—all those re-runs of Gilligan's Island burned up a lot of time that would
have been better spent on pre-calculus. My three-year-old daughter is starting to like Beatles and
that's just fine with me. I do wonder, though, what ol' Marce would have had to say about Barney.

At the same time, though, high-status academic economists often receive top political appointments.
Part of their job is to stand behind the administration's party line. They don't merely make
claims they can't definitively prove; to keep their positions, appointees have to make claims
they don't even believe! Yet high-status academic economists are proud to accept these jobs
- and their colleagues admire them for doing so. ...

Four years after a huge deflationary shock with no apparent shock to technology, asset-pricing
papers and labor search papers and international finance papers and even some business-cycle
papers continue to use models in which business cycles are driven by technology shocks. No theory
seems to have been thrown out. And these are young economists writing these papers, so it's
not a generational effect. ...

If smart people don't agree, it may because they are waiting for new evidence or because
they don't understand each other's math. But if enough time passes and people are still having
the same arguments they had a hundred years ago - as is exactly the case in macro today - then
we have to conclude that very little is being accomplished in the field. The creation of new
theories does not represent scientific progress until it is matched by the rejection of failed
alternative theories.

The root problem here is that macroeconomics seems to have no commonly agreed-upon criteria
for falsification of hypotheses. Time-series data - in other words, watching history go by and
trying to pick out recurring patterns - does not seem to be persuasive enough to kill any existing
theory. Nobody seems to believe in cross-country regressions. And there are basically no macro
experiments. ...

So as things stand, macro is mostly a "science" without falsification. In other words, it
is barely a science at all. Microeconomists know this. The educated public knows this. And that
is why the prestige of the macro field is falling. The solution is for macroeconomists to A)
admit their ignorance more often (see this Mankiw article and this Cochrane article for good
examples of how to do this), and B) search for better ways to falsify macro theories in a convincing
way.

The hero of this story is the $100 bill — or rather, the wad of $100 bills. My first meeting
with those lovely $100 bills came at the end of my interview for a job teaching English at the American
University of Iraq Sulaimaniya (AUIS). At the end of the interview, the Chancellor, Joshua Mitchell
asked me what my travel expenses had been and pulled out a wad of $100 bills. He peeled off 11 of
them — the cost of my ticket — and slapped them down on the table, snarling, "There, that's how
I do business!"

It certainly wasn't the way most American academics do business. Most Americans are horrified
by the sight of large amounts of cash, and American academics, an even more squeamish lot than most,
would never have slapped that much money down on a table without asking for a receipt or any other
formality. I was impressed; there's something appealing about raw gangsterism popping up when you
expected overcautious pedantry — especially when that raw gangsterism is giving you cash.

Any scruples I might have had about joining the occupation vanished with the last of our cash.
My wife Katherine and I had been truly poor in the preceding three years — homeless, begging at
food banks, the whole deal. I even published some helpful hints in AlterNet for those experiencing
real poverty for the first time.

We went to Iraq to make money, not because we believed the neocon talk about training Iraq's
future leaders in the great ideals of the West.

And once we got to know our colleagues at AUIS, we found that nearly all the faculty was there
for the same reason. Oh, they knew the talking points — democracy, Great Books, transforming an
authoritarian culture — but they were in Iraq to make money. Well, to make money and to drink. In
fact, when the talk got boozy, as it almost always did at faculty gatherings, the nonsense about
bringing democracy disappeared and people started talking openly about SUVs and houses in the country.

AUIS bloomed in the Northern Iraqi desert, a very artificial growth sustained hydroponically
with US tax dollars. One night, at a very boozy faculty party, some veteran AUIS teachers told us
the secret story of how the place was created. They claimed that AUIS was born when John Agresto,
a right-wing academic and vassal of the Cheney clan, drove over the Turkish border with $500,000
cash taped to his body. There was something grotesque about this legend, because Agresto is a notably
fat man, and once you'd heard the legend of his cash-strapped trip across the border, you couldn't
help imagining him bulging with cash on top of his other bulges, like a wombat infested with botfly
larvae.

Bizarre as that story sounds, it's probably true. Stranger things, involving much bigger stashes
of tax money, have happened throughout the US occupation of Iraq — and Agresto certainly had the
political connections to score that kind of cash. In the early stages of the US occupation after
the 2003 invasion of Iraq, Agresto was in charge of "reforming" the Iraqi education system on good
Republican principles. To his credit, he wrote a reasonably honest book about the experience called
Mugged by Reality. Unfortunately, the mugging didn't take; Agresto has gone back to his right-wing
roots, avoiding that disrespectful thug, Reality, as much as possible.

Agresto has a very typical right-wing biography, steeped in resentment and nourishing long, slow,
vengeful designs on the academic profession which had humiliated him. He was a Reagan appointee
to the National Endowment for the Humanities in the mid-1980s, joining his patron, Bill Bennett,
in the project to de-fund the Left. But when he was nominated as Deputy head, a job that required
congressional confirmation, Agresto was bitterly humiliated. He was criticized as a "mediocre political
appointment" by the American Studies Association, with a dozen academic organizations joining up
to issue a statement deploring his "decidedly partisan reputation." There were also raised evebrows
at the fact that a witness who testified for Agresto at his confirmation hearings had recently been
given a large grant at Agresto's behest. After these bruising revelations, his nomination was dropped.

Humiliation was the theme of all Agresto's memories of venturing into the wider world, beyond
the tiny enclave of neocon academics. Even his ideological allies seemed to hurt him; he once described
Lynne Cheney, his boss at the NEH, as "gruff and manly," then repeated with real hatred in his voice,
"Gruff…she was gruff."

All that bitterness, and all those wads of taxpayer cash, ended up in the creation of AUIS. It
was planned, as we new faculty were told, as a three-campus system, with branches in Baghdad and
Southern Iraq. But Reality mugged that plan savagely; any attempt to stroll the groves of academe
in any part of Iraq other than the Kurdish far north would have been interrupted with a lesson in
practical physics from an IED.

Agresto took that money to Sulaimaniya, in the Kurdish zone of Northern Iraq, and set up AUIS,
with himself in charge. He apparently chose Kurdistan for the simple reason that Baghdad, the natural
place to put an American university in Iraq, was already too dangerous for Americans.

So AUIS was sited in Sulaimaniya, a quiet Kurdish town near the Iranian border with a long reputation
of separatism towards the rest of Iraq, especially Arab Iraq. Saddam recognized Sulaimaniya's tradition
of fierce independence, once saying that "the head of the serpent lies in Sulaimaniya."

"Suli," as we expats called it, is a quiet, dusty town. When you fly into the Suli airport, the
city seems almost invisible, because the favorite building material is concrete, and the beige and
tan blocky houses blend perfectly with the dry brown hills. It's hot in the summer and cold and
damp in the winter and there's very little to do. One of my colleagues described living there as
"sensory deprivation."

I arrived, with a dozen other new hires, in September 2009. We flew in on the same plane and
were taken to our hotels on the same bus. Most of us were pretty flinchyll at first, wincing at
every loud noise.But we soon learned there was nothing to fear from terrorists or even street hawkers.
The Pesh Merga, the Kurdish militia who run security, are extremely effective, and the Kurds themselves
are a polite, phlegmatic people.We soon realized the only danger in Suli was crossing the street.
Everybody who's anybody in Suli has an SUV — Kia Sportages for the middle class, Toyota Landcruisers
for the rich — and very few locals know how to drive. But there is no violence against foreigners,
as far as I know. We learned to go back to sleep after hearing bursts of AK fire, the established
manner of celebrating a wedding or an election or just the fact that it's Friday night. The only
time I really flinched, once we were settled in, was when a bolt of lightning detonated directly
above our hotel in the middle of the night. And even then, though I assumed it was a bomb, I wasn't
worried for our safety; my first thought was, "Agh, they'll send us home and I won't get any more
of that money."

In fact, I want to say clearly here how much I like and admire the people of Suli, my students
in particular. They were a wonderful change from the timid, bland kids I've encountered in my recent
North American teaching experiences. Most of the students at AUIS could name relatives tortured
or killed by Saddam, or in the vicious Kurdish civil war of the 1990s, and nearly all of them were
studying in an alien language they'd had little chance to learn properly. Yet they were smart, funny
and without self-pity.

It was my fellow Americans who were the problem. And I was not alone in that opinion. I once
asked a colleague at AUIS if she had any trouble getting respect from male Kurdish students. She
looked at me like I was crazy and said, "Absolutely not. Are you kidding? The problem around here
isn't the students, it's the assholes in the Main Building."

The Main Building dominated the campus. In fact, the campus was divided in two like an ante-bellum
plantation: there was the Main Building and the cabins. The cabins were cheap, prefabricated white
metal shacks, shimmering in the bright sunlight, laid out like an army camp inside a square of blast
walls. All the actual teaching, and all the teachers' offices, were in the cabins. The Main Building,
a big stone Soviet-style edifice, was reserved for the administrators' vast offices.

American taxpayer dollars at work: Sure there's no money for Social Security or Medicare or health
insurance, but hey, look on the bright side: Tens of millions of American dollars produced this
gorgeous scene!

That was the real campus. It wasn't the one we'd seen online. That was the first shock of our
arrival: finding out that the huge, luxurious campus on the AUIS website — the one you could fly
around on a "virtual tour" that swooped along tiled walkways connecting grand buildings labeled
"Presidential Building" and "Student Housing" — didn't exist.

Oh, there's a construction site, sitting on a dry hillside just out of town. And for years, AUIS
shamelessly showed a "virtual video" of that site as it's supposed to look, if and when it's ever
finished, as if it already were the campus. It may never be finished; already the university hired
and finally fired a local construction firm which missed every deadline it was set. A Turkish company
has the contract now, adding to the Turks' domination of all business in Iraqi Kurdistan.

When anyone at AUIS dared to suggest that it wasn't very honest to keep up the "virtual tour"
fiction, Mitchell and Agresto had a stock response: "We're a startup operation!" It reminded me
of a stand-up comic's line: "I try to remain new on the job as long as possible."

One reason we accepted shocks like the nonexistent campus so docilely was that, when our minders
met us at the Suli airport, they gave us a nice little packet containing a cellphone and $5000 cash
"to help [us] settle in."

Next day, they took us to the real campus and assigned us to one of the white cabins. We soon
discovered that these cabins were damn near fictions themselves. They were so shoddily built that
the door handles came off nearly every one of them at some point in my year at AUIS. Mine decided
to fall off at the worst possible moment, after a morning of grading essays with the help of way
too much coffee, just when my aging bladder decided it had had enough. I walked quickly to the door
and — clunk. The door handle had become a souvenir, a key chain.

The shoddiness of the cabins came in handy at that point, because all I had to do was bang on
the wall we shared with professors in the other half of the cabin, and one of my colleagues obligingly
came over and opened the door from the outside. He knew what that banging on the wall meant; the
same thing had happened to him a week earlier. It all made for a kind of cheerful roughing-it camaraderie,
but it also underlined the strange sense of falseness, that you were living and teaching in a stage
set.

All the claims AUIS made had the same stagey, silly feel, a boastful absurdity typical of the
US in Iraq. The claims made for our mission were ridiculous; we were supposed to be transforming
Iraq's culture, teaching its future leaders a new and democratic way of thinking. But the university
had only 200-odd students, and was straining to accommodate that number. It was hard to see how
a group this size would transform a country of more than 26 million people.

And when I taught my first classes, I learned that those few students were woefully unprepared
for university courses in English. We'd been told — another lie, of course — that the university's
ESL program produced fluent speakers and writers of English. That was a joke. Had I graded my students
at the same level as in an American university — another one of our official fictions — at least
two-thirds of them would have failed. A better man would no doubt have done the principled thing;
I wanted those $100 bills and simply handed out a lot of generous C's and B-'s.

Total fabrication; that's what it all seems like now. We were supposed to be bridging the great
ethnic divides of Iraq, but in that first semester, I taught a Composition course that consisted
of what I thought of as a "Wall of Kurds" and a "Wall of Arabs." The class was almost entirely male,
and had the feel of a gang fight in hibernation. On one side of the room was the Wall of Kurds,
a half dozen tough-looking, rural Kurdish students who spoke very little English; and on the other,
a half-dozen much more urbane but much wimpier Arab students from Baghdad who wore a permanent flinch.
The Arabs spoke and wrote much better English, the beneficiaries of Saddam's preferential treatment
of Baghdad, and the Kurds resented every sentence their erstwhile tormentors got right.

Both groups regarded me as an ephemeral inconvenience — a real surprise for me, because Agresto
had assured me in the job interview that we were the biggest thing in these kids' lives, the transformative
yeast in the Iraqi loaf. At AUIS, he had told me (and every other new teacher), we'd see the total
dedication to learning that we had longed for, and missed, in American students.

It never appeared. What I saw was several hundred lively, intelligent adolescents who were tremendously
excited about living away from home, talking to members of the opposite sex, and trying on new identities.
Classic adolescent stuff. There were times, in good weather, when the panorama of fevered social
cliques occupying their few square meters of turf on the steps of the Main Building made the place
look like a teen movie or a live-action Archie comic — all those family-ridden kids, burdened with
having to be somebody's son or daughter, brother or cousin, all their lives, suddenly allowed to
be characters out of Heathers or Clueless.

There was an even bigger problem with fulfilling our messianic mission: the faculty. We were
not an impressive bunch. There were good teachers at AUIS — I won't name them, because praise from
me might get them fired–but they survived by lying low; being bright and a good teacher made you
suspect in a place where center stage was firmly occupied by a clique of loud, provincial rightwing
nuts. In this sense, AUIS was an excellent microcosm of the American polity that had produced it:
the best lacked all conviction, while the worst (with apologies to Yeats) raked in the cash and
talked nonsense.

Successful Profs: Red-State Brown-Nosers with No Qualifikashuns

There was a clear, simple formula for success at AUIS: be a Southern white male Republican with
a talent for flattery, an undistinguished academic record, and very little experience in university-level
teaching.

Some of the faculty were so dismally unqualified and shameless that even our students, mostly
reverent toward foreign authority-figures, saw through them.

The man Agresto hired to teach American History makes a perfect Exhibit A in any list of what's
wrong with AUIS. The first sign that he was not exactly committed to intellectual integrity was
his choice of textbook for the course: an abominable book called America: The Last Best Hope, by
William Bennett. Yes, THE William Bennett, Reagan's Secretary of Education, the buffoon who sermonized
on virtue until his gambling losses added up so high that they drowned out his pomposities, the
man who once scolded a child in public for wearing a Bart Simpson t-shirt.

Bennett's title sums up the thesis of his textbook clearly: America is literally, simply, the
last and best hope for the human species. Tough luck, China — or Burma, or Ecuador, or any other
nation on the planet — because we R it, the alpha and omega. It's a classic reactionary thesis:
"I can't imagine any nation ever being as great as America; therefore no nation ever will be." Argument
by lack of imagination — a favorite among opponents of evolution, biological or historical.

My students used to leave this book on their desks between classes, so I had a chance to flip
through it. I expected it to be awful, but it was even worse than I could have guessed. Bennett
gives sleazy imperial apologists a bad name. If you want to see this thing done well, try Hitchens
or Paul Johnston, the British neo-imperialist historian from the Thatcher era. Bennett, who can't
write worth a damn and has never done original research in his life, is the worst of that very bad
lot.

One student, the son of prominent Kurdish freedom-fighters and a genuine believer in things like
intellectual freedom, saw through Bennett and had the courage to complain about the book. The teacher
replied, "Well, this is a conservative university and it's my job to give you the conservative perspective."
A simpler, more honest answer would have been: "Look, kid, I got this job by sucking up to John
Agresto, who happens to be a close friend of William Bennett, so my hugely-inflated salary depends
on feeding you this crap." I still remember the disgusted shrug the student gave after telling me
the story. He was learning about Western standards of intellectual integrity, all right — but not
the way he was supposed to be.

Luckily for the students in American History, they spent most of their time watching war movies
rather than reading Bennett's Sunday School tales. Since I taught in the same cabin as our American
History instructor, separated from his class by a flimsy metal wall, I got to listen to a whole
semester's worth of bad WW II films. Three long months of trying to teach my students to use the
simple present, rather than the present progressive, in their essays, shouting to be heard over
the corny dialogue coming through the wall: "I'm hit, Sarge! Uh…go on without me!"… usually followed
by explosions that rocked the thin metal wall, as Sarge and friends took their revenge for the Gipper.

His one criterion was "bad language." He wouldn't show any movie with swearing in it (thus eliminating
every decent war movie ever made). That scruple served him in place of any squeamishness about giving
his teaching to the likes of William Bennett and John Wayne.

And for this, he was paid about $15,000 per month. The only reason I know he made that much is
that he was a terrible braggart. We'd just been paid our first month's salary, in cash, and as he
walked with me among the cabins, he crowed, "Here I am walkin' along with $15,000 cash in my pocket!"

He didn't rate that sort of money because of his qualifications. As in, he didn't got none. Not
even a Ph.D. (though he claimed later to have picked one up from an online degree mill). He had
no recent teaching experience, and no academic publications. Even by the lax standards of AUIS,
the disparity between his rank and his qualifications became the object of speculation.

It was only through his habit of boasting that we found out the truth. As the winter break approached,
he started strutting around telling everyone how he was going home to lobby Sen. Saxby Chambliss
of Georgia, his home state, to send AUIS a big grant. He liked to boast while grooming himself in
the stinking men's room of the Cabins, which always stank like a chicken coop in hot weather. Standing
at the urinal, he boasted to anyone trying to empty their bladders in his vicinity that his wife
was one of the richest women in the state and a close friend of the Senator. He'd have no trouble
getting an audience with Chambliss.

So that $15,000/mo. salary was only nominally for teaching; the man was actually a lobbyist with
connections to the sleaziest and most lucrative crannies of the Southern rightwing elite. When I
heard him boasting about his connections to Chambliss, I looked up the good senator and got another
involuntary lesson in the utter falseness of the ideals holding up AUIS and its constituency. Saxby
Chambliss was elected to the Senate in 2002 thanks to campaign ads showing the incumbent, Max Cleland,
next to photos of Osama bin Laden. Even John McCain called the ads "reprehensible." But that's not
the worst of it: Max Cleland, whose patriotism Chambliss impugned, lost three limbs to a grenade
while fighting in Viet Nam. Saxby Chambliss never served, supposedly because he had a bad knee from
playing high school football. The knee, of course, miraculously recovered once ol' Saxby was past
draft age.

Jack | October 12th, 2010 at 9:22 am

American academia is like some kind of sick disease that even though the body it's parasited
is in its death throes is spreading across the globe in the form of these Amerikun Biznez schools
subsidaries of international educational corporations that are peddling their product all over
the globe.

The unemployment department in the country where I'm living forced me to take a job with
them. Some of the kids weren't too bad but most of them were just to poor students to get into
a National University but for some reason thought they were destined to be managers and give
orders to people. I came to work drunk every day and made them watch American Psycho and learn
the lyrics of GG Allin songs; especially I Kill Everything I Fuck.

Google translation from French

The crisis has been triggered largely because contemporary economists Keynes had rejected in favor
of Chicago School represented by Milton Friedman?
Friedman believed that Keynes was wrong when he claimed that every crisis could be resolved by a
gradual expansion of the money supply.
So he set out the principle that tax policies - and thus government spending to stimulate the economy
- were not necessary.
For his part, Keynes was inspired by the Great Depression and blamed precisely the policy of contraction
in money supply initiated by the Federal Reserve at the time who should have instead adopted a logical
expansion.
He was so convinced that recessions and depressions that were mainly caused by a fall in consumption.

The remedy advocated by Keynes was logically in a substantial reduction in interest rates allow
a recovery in consumption.
The cash would be generously provided by the State which would therefore a key role in activating
its printing press in spite of deficits that are transient, however, because the stimulus would
go to ...
According to the Keynesians (as Paul Krugman), the onset of the crisis in 2007 would indeed be a
textbook case since the implosion of the housing bubble has devalued the mortgage securities held
by banks had immediately sunk the savings
into recession draining the credit.

Macroeconomic lessons are certainly valid to study the Great Depression while leaning on the theory
of business cycles.
However, analyzing the current crisis (started in 2007) against these same criteria - despite their
intellectual elegance - would result in dramatic commit the same mistakes.
Economists have forgotten that the economy must first serve man and society because the world of
contemporary economics is overrun with financial mathematics exercising a tyranny leaving no room
for the social sciences!
The economist said mischievously that Heilbroner had instilled a rigorous mathematics to economics
before killing her!
Unless this is the use which has been made which led to the present tendencies since the condemnation
of the followers of Keynes in favor of Chicago does not mean progress.

This is the entire profession must now recognize that it was mistaken in its assessment of a highly
complex system ... it still
does not understand completely! Yet we
have learned a lot.
That our financial system is even more dangerous as some Bankers delight in pushing their off-balance
sheet ratios and the risk that their mechanical explode at any moment.
That even the States are obliged to cheat!
We also know that this mismanagement is not a coincidence - or accident - but rather the result
of a perverse pressure exerted continuously on a profession that is asked time and again the figure
...
However, and this is a major lesson of this crisis, these behaviors to limit the criminal is only
possible thanks to lax - or complicity?
- The regulator and lawmakers believe that what is good for banks is necessarily good for the country.

From his perspective, Krugman is right to defend Keynes because it conforms well to the creed current
among elites consisting spend lavishly in order to save a profession and a system without which
themselves no longer exist!
What Greenspan did after the collapse of technology stocks drastically reducing interest rates in
2001, Bernanke (his successor as head of the Fed) and saving the printing press began in 2007 on
a scale
more
massive, a prelude to all types of risky behavior to come.
In other words, the financial system of tomorrow will be even more dangerous than yesterday because
this crisis tells first failure of any caste could not economists warn against the formation or
against the devastating implosion of bubbles and
suspicious behavior.
It is true that the debate is mostly limited to crocodiles that frequent the same lake ...

Can
"Science" of economic one day share the fate of anthropology or phrenology?
In other words, this science of economics does become a science fossil vaguely respected for it
has brought but completely outdated?
Meanwhile, economists form a sort of caste of Brahmins or omens waving equations hyper sophisticated
and always quick to give their opinions on political decisions.
Their sole ambition: to be occult advisors to Princes mandarins.
They live in fact backed by the powers that be, having their own system of recognition.
While waiting for their inevitable fossilization.

If these eminent thinkers are at the edge of economic orthodoxy, why are they marginalized
within the corridors of power? One reason is that politics, not surprisingly, tends to get personal.
Both Stiglitz and Krugman have decided to air their views in public rather than operating as
discreet outside members of a kitchen cabinet... Stiglitz, even more than Krugman, has not been
shy about criticizing Summers and Treasury Secretary Timothy Geithner by name, and the disfavor
has been richly returned. Though Krugman's column praises the Obama administration when the
president gives Krugman half a reason to do so, the White House accurately perceives him and
Stiglitz as off-message and part of the opposition.

More fundamental to their marginalization is the relative radicalism of what Krugman and
Stiglitz are advocating in our conservative era, one in which even Democratic presidents have
done little to reverse unconstrained finance, shrunken government, and deepening inequality.
To embrace their wisdom would require something close to a political revolution. So two of our
most lauded economists remain prophets with little power to change events. America would be
a far healthier country if they broke through.

Jeffrey Stewart:

This is a relatively easy puzzle to solve. It absolutely doesn't matter to politicians and those
funding their campaigns that Krugman and Stiglitz are 100% correct. If Krugman and Stiglitz
were advocating policies that benefited the wealthy rather than the majority of the population,
they would be listened to and have influential positions in any administration. There is a near
complete capture of the state by capital. This means that only policies that directly benefit
financial, industrial and commercial capitalist and only indirectly the working class, e.g.,
trickle down economics of tax cuts and deregulation get a hearing and are considered "serious,"
"responsible" and in the "mainstream" i.e., not "radical" or "extreme."

"In the domain of
Political Economy, free scientific inquiry meets not merely the same enemies as in all other
domains. The peculiar nature of the materials it deals with, summons as foes into the field
of battle the most violent, mean and malignant passions of the human breast, the Furies of private
interest."

MRJ -> Darryl FKA Ron...

I like your comment about them being like each other.

One example: The right wing today includes a large contingent who actively desire and
promote the failure of the US, both economically and politically, so that their side can win
the up-coming election, which is strikingly reminiscent of Lenin's tactics prior to the Russian
Revolution.

Seth -> Jeffrey Stewart...

Correct. Krugman and Stiglitz are not being ignored by accident or simple misunderstanding.
They are being studiously ignored. They are met with deep sighs and 'polite' eyes are averted
in the hope that K & S will tire themselves out and simply shut up.

Here was my reaction to Krugman's recent "I'm Not Clubbable" post:

Clubbable is a synonym for Very Serious: it means taking social cues from higher status peers
as the basis for evaluating information. Rather than evaluating claims by reference to facts
and their logical connections, a VSP understands that demonstrating loyalty to the status hierarchy
will better serve their personal interests. Demonstrated failure to conform to social expectations
by stubbornly sticking with conclusions drawn from reasoned argument will make clubbable people
acutely uncomfortable. They need to disassociate themselves lest they gain a reputation as a
'fellow-traveller' with disloyal types.

This is why economics went seriously wrong -- indeed the discipline quite simply 'sold out'
-- when it abandoned attempts to take account of power. Power *constrains* economic outcomes,
markets merely optimize within the constraints set by power.

The irony is that this sell-out is what gives economics professors the cache required
to have an audience among the powerful in the first place. But when you try to speak
the truth, you begin to sound uncomfortably like those scary Marxists the VSP's thought they
had managed to purge many years ago.

Policy is made by [the most senior] members of the club. Your role in their world is to justify
the policies they derive from their need to reinforce the status quo power structure. I'm glad
you refuse to play that sycophantic part in their little morality play, but it isn't at all
mysterious why you are treated the way Cassandra was.

Jeffrey Stewart

An excellent example of this pro-capitalist bias is the capitalist, corporate media and VSP
fawning over the Ryan budget while the Progressive Caucus' Budget For All received...crickets.

denim:

"It's been really frustrating to watch policymakers listen to the people who got it wrong
again and again, not just before the crisis but during it as well, while ignoring the people
who largely got things right, and then wonder why the policies weren't more effective. If they'd
listened, and it's not too late to start, things could be better today." The policymakers wanted
it wrong. The goal is to establish Ayn Rand's vision for America where the sociopath is the
most venerated leader of all in business or politics. A well managed pseudo-crisis works wonders
for scaring the masses into the slaughterhouses.

From John Heilemann's article about the falling out between Obama and Wall Street:

After countless rehearsals of the options, Obama wanted to hear a broader range of voices.
So in April, a dinner was set up at the White House with the president and a clutch of big-name
economists: Paul Krugman, Joseph Stiglitz, Jeffrey Sachs, Alan Blinder, Kenneth Rogoff. "That
turned out to be a defining moment in the debate," Geithner told me. "Partly because they were
all disagreeing with each other, and partly because they knew what they were against but not
exactly what they were for and what it entailed—except Krugman. He was the only one willing
to say, 'Look, there's a good case for nationalizing, but if you do, you have to understand
two things: One, it's incredibly expensive, it'll cost trillions; and two, you have to guarantee
everything.' " Once again, Obama cast his lot with Geithner. Uh, no. I never said that it would
cost trillions of dollars. On the contrary, I didn't think taking over Citi or B of A, which
had near-zero market caps at the time, would cost much at all. I did say that we'd have to guarantee
the debts of the seized banks, much as the Swedes did; but I think I said then, and certainly
believed, that we were de facto guaranteeing those debts anyway — that we had already socialized
the possible losses, and that the point was to give taxpayers a share of the potential gains.

I'm glad to get credit for being more realistic than the other guys — but Geithner seems
to be putting a spin on what I actually said.

"Given his support for Hillary Clinton, it is hard to take Krugman seriously when
he lambaste the Obama administration for centrism and compromising progressive values."

As Krugman has pointed out again and again Obama didn't pose as a Nation-type progressive,
then suddenly turn to the right after he won the Democratic nomination. He was always slightly
less progressive than Hillary Clinton on domestic issues, and more than slightly on health care.

Mundus vult decipi, ergo decipiatur

Paine:

Oh please the Hill and Barry different in practice

Hill would use the same people and get the same results or less Given her cave factor under
pressure

Mark A. Sadowski:

"Given her cave factor under pressure"

Give me a break.

Obama routinely stakes out a postion just to the left of the opposition, not because he's
planning any grand Bill Clintonesque triangulation strategies, but because he *really
is* the Republican-lite he's always said that he was.

But then he *always* gives into the Republicans and throws a pony into the deal for good
measure.

Barry should write a book on "The Art of the Cave-In" when this thing is all over.

Mike -> Sarah...

It is not just Obama. In general, modern day Democrats are to the right of Nixon. They
are not liberal or progressive.

I have debated with many on the so-called left about how poor Obama's economic policies have
been, and they either typically defend his policies or outright champion them.

It is flat out bizarre, but this is the land of confusion where Democrats are anything but
liberal and Republicans are anything but conservative. Neither party takes kindly to criticism
since they are too busy looking to blame the other party for their poor performance since it
is their best chance to retain power.

Darryl FKA Ron:

Ignoring intellectuals is nothing new or singular in the US. Frederick Perls was out-voted
by big pharma in the AMA/APA. Ian Mitroff has met much the same resistance as Peter Drucker.
Drucker received much acclaim, but almost no one ever applied his practices. They were managing
for different results. Ignored intellectuals are a dime a dozen. I prefer the Stig myself, but
neither one should feel like the lone ranger. Now Joe Schumpeter was an intellectual that did
not get ignored. So, it just depends upon what you are selling.

John Hulls:

The real irony of this is that the purpose of government should actually be to protect
the one percent from themselves and preserve the economy for all. As a retired history
professor friend recently told me, the way to understand the current Greek econodrama is to
read Arisophanes 'The Acharnians', which I wrote about in a piece entitled 'Hedging the Apocalypse'
at http://somewhatlogically.com/?p=598
which is mostly raises the question as to why the financial community fails to learn from others
about management of high risk situations, such as nuclear weapons and aircraft safety.

What is so disturbing is that what is going to happen is pretty apparent if you take a look
from a perspective outside the current economic debate, and alternate methods of modeling the
economy. (I'm interested in analog simulations to illuminate environmental and resource utilization)
I can't resist posting a link to a piece that I wrote in 2008, from 'Too Big to Fail to Too
Large to Care' at http://somewhatlogically.com/?p=51

Krugman and Stiglitz are sadly right, but tend to put their answers in mostly economic terms,
which don't really seem to resonate with the public, as did Roosevelt's specific programs, such
as the REA and federal power projects. As Brad Delong's wife said in a recent post on his blog,
referring to the REA "Thankee Mr. Roosevelt"

ilsm -> John Hulls...

The foundation of the democratic party goes back to Andrew Jackson or before, Jefferson.

Jackson fought the bank because the US bank threatened to bribe the lower chanber from being
the peoples' house.

There was always the feeling that the elites were filled with vice and would corrupt the
virtues that the masses would fit to the republic.

TR and FDR were fans of Jackson as was Truman.

A respect for Old Hickory is in order.

Darryl FKA Ron -> John Hulls...

John,

Pretty kool dude. Cross disciplinary science is a must in a modern world, but the econ world
has not all got on board with that yet. I just had time to skim the first article, but was smiling
the whole time.

Are you familiar with Ian Mitroff?

Here is a list of his books copied from Wiki - just to give you some idea of his range:

1974. The Subjective Side of Science: A Philosophical Inquiry into the Psychology of
the Apollo Moon Scientists. Elsevier, Amsterdam (reissued in 1984 by Intersystems Publishers,
Seaside, California).

1994. The Challenge of the 21st Century: Managing Technology and Ourselves in a Shrinking
World. With Harold A Linstone. State University of New York Press, Albany, New York.

1994. Framebreak: The Radical Redesign of American Business. With Richard O. Mason,
and Christine M. Pearson. Jossey-Bass, San Francisco.

1996. The Essential Guide to Managing Corporate Crises.

1998. Smart Thinking for Crazy Times: The Art of Solving the Right Problems. With Christine
M. Pearson, and Katharine L. Harrington. Oxford University Press, New York. The Management
of Crises and Paradoxes: Preventing the Destructive Effects of Organizations (in French).
H.E.C., Montreal, Canada.

1999. A Spiritual Audit of Corporate America: A Hard Look at Spirituality, Religion,
and Values in the Workplace. With Elizabeth A. Denton. Jossey-Bass Publishers Inc., San
Francisco.

2000. Managing Crises Before They Happen: What Every Executive Needs to Know About Crisis
Management. With Gus Anagnos. AMACOM, New York.

2003. Crisis Leadership: Planning for the Unthinkable. John Wiley, New York.

And the fact that the GOP lying about the economy...and especially the budget...is so accepted
and expected means that any Republican who wasn't jump-the-shark ridiculous on these issues
wouldn't be allowed to stay in the party much longer. ...

House Speaker John Boehner (R-OH) ... easily qualifies as the weakest and least effective Speaker
in my lifetime and has to be included on the list of the all-time worst in U.S. history, demonstrated
yet again that he'll say and do anything to stay speaker even when what he's saying about the
budget can easily be shown to be nonsense and when he knowingly and without giving it a second
thought threatens the well-being of the U.S. economy.

I'd say this doesn't bode well for the outcome of this year's federal budget debate, but that's
both obvious and an understatement. It actually points to the a period in U.S. history that
is very likely to be labeled by historians as its economic dark ages.

I think that reporting on economic issues has improved, and that blogs have something to do with
that. But when it comes to political reporting on economic (and other) issues, it's just as disappointing
as ever. If there's no reputational or other costs associated with this behavior, why stop?

And the Yale research published today reveals that if Americans knew more basic science
and were more proficient in technical reasoning it would still result in a gap between public
and scientific consensus.

Indeed, as members of the public become more science literate and numerate, the study
found, individuals belonging to opposing cultural groups become even more divided on the
risks that climate change poses.

Funded by the National Science Foundation, the study was conducted by researchers associated
with the Cultural Cognition Project at Yale Law School and involved a nationally representative
sample of 1500 U.S. adults.

"The aim of the study was to test two hypotheses," said Dan Kahan, Elizabeth K. Dollard
Professor of Law and Professor of Psychology at Yale Law School and a member of the study
team. "The first attributes political controversy over climate change to the public's limited
ability to comprehend science, and the second, to opposing sets of cultural values. The
findings supported the second hypothesis and not the first," he said.

"Cultural cognition" is the term used to describe the process by which individuals' group
values shape their perceptions of societal risks. It refers to the unconscious tendency
of people to fit evidence of risk to positions that predominate in groups to which they
belong.

The results of the study were consistent with previous studies that show that individuals
with more egalitarian values disagree sharply with individuals who have more individualistic
ones on the risks associated with nuclear power, gun possession, and the HPV vaccine for
school girls.

By Cathy O'Neil, a data scientist who lives in New York City and writes at
mathbabe.org

Naked Capitalism

Yesterday I caught a lecture at Columbia given by statistics professor
David Madigan, who explained
to us the story of Vioxx and
Merck. It's fascinating and
I was lucky to get permission to retell it here.

Disclosure

Madigan has been a paid consultant to work on litigation against Merck. He doesn't consider Merck
to be an evil company by any means, and says it does lots of good by producing medicines for people.
According to him, the following Vioxx story is "a line of work where they went astray".

Yet Madigan's own data strongly suggests that Merck was well aware of the fatalities resulting
from Vioxx, a blockbuster drug that earned them $2.4b in 2003, the year before it "voluntarily"
pulled it from the market in September 2004. What you will read below shows that the company set
up standard data protection and analysis plans which they later either revoked or didn't follow
through with, they gave the FDA misleading statistics to trick them into thinking the drug was safe,
and set up a biased filter on an Alzheimer's patient study to make the results look better. They
hoodwinked the FDA and the New England Journal of Medicine and took advantage of the public trust
which ultimately caused the deaths of thousands of people.

The data for this talk came from published papers, internal Merck documents that he saw through
the litigation process, FDA documents, and SAS files with primary data coming from Merck's clinical
trials. So not all of the numbers I will state below can be corroborated, unfortunately, due to
the fact that this data is not all publicly available. This is particularly outrageous considering
the repercussions that this data represents to the public.

Background

The process for getting a drug approved is lengthy, requires three phases of clinical trials
before getting FDA approval, and often takes well over a decade. Before the FDA approved Vioxx,
less than 20,000 people tried the drug, versus 20,000,000 people after it was approved. Therefore
it's natural that rare side effects are harder to see beforehand. Also, it should be kept in mind
that for the sake of clinical trials, they choose only people who are healthy outside of the one
disease which is under treatment by the drug, and moreover they only take that one drug, in carefully
monitored doses. Compare this to after the drug is on the market, where people could be unhealthy
in various ways and could be taking other drugs or too much of this drug.

Vioxx was supposed to be a new "NSAID"
drug without the bad side effects. NSAID drugs are pain killers like
Aleve and
ibuprofen and
aspirin, but those had the unfortunate
side effects of gastro-intestinal problems (but those are only among a subset of long term users,
such as people who take painkillers daily to treat chronic pain, such as people with advanced arthritis).
The goal was to find a pain-killer without the GI side effects. The underlying scientific goal was
to find a COX-2 inhibitor without
the COX-1 inhibition, since scientists
had realized in 1991 that COX-2 suppression corresponded to pain relief whereas COX-1 suppression
corresponded to GI problems.

Vioxx Introduced and Withdrawn From the Market

The timeline for Vioxx's introduction to the market was accelerated: they started work in 1991
and got approval in 1999. They pulled Vioxx from the market in 2004 in the "best interest of the
patient". It turned out that it caused heart attacks and strokes. The stock price of Merck plummeted
and $30 billion of its market cap was lost. There was also an avalanche of lawsuits, one of the
largest resulting in a $5 billion settlement which was essentially a victory for Merck, considering
they made a profit of $10 billion on the drug while it was being sold.

The story Merck will tell you is that they "voluntarily withdrew" the drug on September 30, 2004.
In a placebo-controlled study of colon polyps in 2004, it was revealed that over a time period of
1200 days, 4% of the Vioxx users suffered a "cardiac, vascular, or thoracic event" (CVT event),
which basically means something like a heart attack or stroke, whereas only 2% of the placebo group
suffered such an event. In a group of about 2400 people, this was statistically significant, and
Merck had no choice but to pull their drug from the market.

It should be noted that, on the one hand Merck should be applauded for checking for CVT events
on a colon polyps study, but on the other hand that in 1997, at the International Consensus Meeting
on COX-2 Inhibition, a group of leading scientists issued a warning in their Executive Summary that
it was "… important to monitor cardiac side effects with selective COX-2 inhibitors". Moreover,
in an internal Merck email as early as 1996, it was stated there was a "… substantial chance that
CVT will be observed." In other words, Merck knew to look out for such things. Importantly, however,
there was no subsequent insert in the medicine's packaging that warned of possible CVT side-effects.

What the CEO of Merck Said

What did Merck say to the world at that point in 2004? You can look for yourself at
the four and half hour Congressional
hearing (seen on C-SPAN) which took place on November 18, 2004. Starting at 3:27:10, the then-CEO
of Merck, Raymond Gilmartin,
testifies that Merck "puts patients first" and "acted quickly" when there was reason to believe
that Vioxx was causing CVT events. Gilmartin also went on the Charlie Rose show and repeated these
claims, even go so far as stating that the 2004 study was the first time they had a study
which showed evidence of such side effects.

How quickly did they really act though? Were there warning signs before September 30,
2004?

Arthritis Studies

Let's go back to the time in 1999 when Vioxx was FDA approved. In spite of the fact that it was
approved for a rather narrow use, mainly for arthritis sufferers who needed chronic pain management
and were having GI problems on other meds (keeping in mind that Vioxx was way more expensive than
ibuprofen or aspirin, so why would you use it unless you needed to), Merck nevertheless launched
an ad campaign with Dorothy
Hamill and spent $160m (compare that with Budweiser which spent $146m or Pepsi which spent $125m
in the same time period).

As I mentioned, Vioxx was approved faster than usual. At the time of its approval, the completed
clinical studies had only been 6- or 12-week studies; no longer term studies had been completed.
However, there was one underway at the time of approval, namely a study which compared Aleve with
Vioxx for people suffering from
osteoarthritis
and rheumatoid
arthritis.

What did the arthritis studies show? These results, which were available in late 2003, showed
that the CVT events were more than twice as likely with Vioxx as with Aleve (CVT event rates of
32/1304 = 0.0245 with Vioxx, 6/692 = 0.0086 with Aleve, with a p-value of 0.01). As we see this
is a direct refutation of the fact that CEO Gilmartin stated that they didn't have evidence until
2004 and acted quickly when they did.

In fact they had evidence even before this, if they bothered to put it together (in fact they
stated a plan to do such statistical analyses but it's not clear if they did them- or in any case
there's so far no evidence that they actually did these promised analyses).

In a previous study ("Table 13″), available in February of 2002, the could have seen that, comparing
Vioxx to placebo, we saw a CVT event rate of 27/1087 = 0.0248 with Vioxx versus 5/633 = 0.0079 with
placebo, with a p-value of 0.01. So, three times as likely.

In fact, there was an even earlier study ("1999 plan"), results of which were available in July
of 2000, where the Vioxx CVT event rate was 10/427 = 0.0234 versus a placebo event rate of 1/252
= 0.0040, with a p-value of 0.05 (so more than 5 times as likely). This p-value can be taken to
be the definition of statistically significant. So actually they knew to be very worried as early
as 2000, but maybe they… forgot to do the analysis?

The FDA and Pooled Data

Where was the FDA in all of this?

They showed the FDA some of these numbers. But they did something really tricky. Namely, they
kept the "osteoarthritis study" results separate from the "rheumatoid arthritis study" results.
Each alone were not quite statistically significant, but together were amply statistically significant.
Moreover, they introduced a third category of study, namely the "Alzheimer's study" results, which
looked pretty insignificant (more on that below though). When you pooled all three of these study
types together, the overall significance was just barely not there.

It should be mentioned that there was no apparent reason to separate the different arthritic
studies, and there is evidence that they did pool such study data in other places as a standard
method. That they didn't pool those studies for the sake of their FDA report is incredibly suspicious.
That the FDA didn't pick up on this is probably due to the fact that they are overworked lawyers,
and too trusting on top of that. That's unfortunately not the only mistake the FDA made (more below).

Alzheimer's Study

So the Alzheimer's study kind of "saved the day" here. But let's look into this more. First,
note that the average age of the 3,000 patients in the Alzheimer's study was 75, it was a 48-month
study, and that the total number of deaths for those on Vioxx was 41 versus 24 on placebo. So actually
on the face of it it sounds pretty bad for Vioxx.

There were a few contributing reasons why the numbers got so mild by the time the study's result
was pooled with the two arthritis studies. First, when really old people die, there isn't always
an autopsy. Second, although there was supposed to be a
DSMB as part of the study, and one was part of the original proposal submitted to the FDA, this
was dropped surreptitiously in a later FDA update. This meant there was no third party keeping an
eye on the data, which is not standard operating procedure for a massive drug study and
was a major mistake, possibly the biggest one, by the FDA.

Third, and perhaps most importantly, Merck researchers created an added "filter" to the reported
CVT events, which meant they needed the doctors who reported the CVT event to send their info to
the Merck-paid people ("investigators"), who looked over the documents to decide whether it was
a bonafide CVT event or not. The default was to assume it wasn't, even though standard operating
procedure would have the default assuming that there was such an event. In all, this filter removed
about half the initially reported CVT events, and about twice as often the Vioxx patients had their
CVT event status revoked as for the placebo patients. Note that the "investigator" in charge of
checking the documents from the reporting doctors is paid $10,000 per patient. So presumably they
wanted to continue to work for Merck in the future.

The effect of this "filter" was that, instead of it seeming 1.5 times as likely to have a CVT
event if you were taking Voixx, it seemed like it was only 1.03 as likely, with a high p-score.

If you remove the ridiculous filter from the Alzheimer's study, then you see that as
of November 2000 there was statistically significant evidence that Vioxx caused CVT events
in Alzheimer patients.

By the way, one extra note. Many of the 41 deaths in the Vioxx group were dismissed as "bizarre"
and therefore unrelated to Vioxx. Namely, car accidents, falling of ladders, accidentally eating
bromide pills. But at this point there's evidence that Vioxx actually accelerates Alzheimer's disease
itself, which could explain those so-called bizarre deaths. This is not to say that Merck knew that,
but rather that one should not immediately dismiss the concept of statistically significant just
because it doesn't make intuitive sense.

VIGOR and the New England Journal of Medicine

One last chapter in this sad story. There was a large-scale study, called the VIGOR study, with
8,000 patients. It was published in the
New England Journal
of Medicine on November 23, 2000. See also this
NPR timeline
for details. They didn't show the graphs which would have emphasized this point, but they admitted,
in a deceptively round-about way, that Vioxx has 4 times the number of CVT events than Aleve. They
hinted that this is either because Aleve is protective against CVT events or that Vioxx is bad for
it, but left it open.

But Bayer, which owns Aleve, issued a press release saying something like, "if Aleve is protective
for CVT events then it's news to us." Bayer, it should be noted, has every reason to want people
to think that Aleve is protective against CVT events. This problem, and the dubious reasoning explaining
it away, was completely missed by the peer review system; if it had been spotted, Vioxx would have
been forced off the market then and there. Instead, Merck purchased 900,000 preprints of this article
from the NE Journal of Medicine, which is more than the number of practicing doctors in the U.S..
In other words, the Journal was used as a PR vehicle for Merck.

The paper emphasized that Aleve has twice the rate of ulcers and bleeding, at 4%, whereas Vioxx
had a rate of only 2% among chronic users. When you compare that to the elevated rate of heart attack
and death (0.4% to 1.2%) of Vioxx over Aleve, though, the reduced ulcer rate doesn't seem all that
impressive.

A bit more color on this paper. It was written internally by Merck, after which non-Merck authors
were found. One of them is Loren Laine. Loren helped Merck develop a sound-byte interview which
was 30 seconds long and was sent to the news media and run like a press interview, even though it
actually happened in Merck's New Jersey office (with a backdrop to look like a library) with a Merck
employee posing as a neutral interviewer. Some smart lawyer got the outtakes of this video made
available as part of the litigation against Merck. Check out this
youtube video, where Laine
and the fake interviewer scheme about spin and Laine admits they were being "cagey" about the renal
failure issues that were poorly addressed in the article.

The Damage Done

Also on the Congress testimony
I mentioned above is Dr. David Graham, who speaks passionately from minute 41:11 to minute 53:37
about Vioxx and how it is a symptom of a broken regulatory system. Please take 10 minutes to listen
if you can.

He claims a conservative estimate is that 100,000 people have had heart attacks as a result of
using Vioxx, leading to between 30,000 and 40,000 deaths (again conservatively estimated). He points
out that this 100,000 is 5% of Iowa, and in terms people may understand better, this is like 4 aircraft
falling out of the sky every week for 5 years.

According to this blog,
the noticeable downwards blip in overall death count nationwide in 2004 is probably due to the fact
that Vioxx was taken off the market that year.

Conclusion

Let's face it, nobody comes out looking good in this story. The peer review system failed, the
FDA failed, Merck scientists failed, and the CEO of Merck misled Congress and the people who had
lost their husbands and wives to this damaging drug. The truth is, we've come to expect this kind
of behavior from traders and bankers, but here we're talking about issues of death and quality of
life on a massive scale, and we have people playing games with statistics, with academic journals,
and with the regulators.

Just as the financial system has to be changed to serve the needs of the people before the needs
of the bankers, the drug trial system has to be changed to lower the incentives for cheating (and
massive death tolls) just for a quick buck. As I mentioned before, it's still not clear that they
would have made less money, even including the penalties, if they had come clean in 2000. They made
a bet that the fines they'd need to eventually pay would be smaller than the profits they'd make
in the meantime. That sounds familiar to anyone who has been following the fallout from the credit
crisis.

One thing that should be changed immediately: the clinical trials for drugs should not be run
or reported on by the drug companies themselves. There has to be a third party which is in charge
of testing the drugs and has the power to take the drugs off the market immediately if adverse effects
(like CVT events) are found. Hopefully they will be given more power than risk firms are currently
given in finance (which is none)- in other words, it needs to be more than reporting, it needs to
be an active regulatory power, with smart people who understand statistics and do their own state-of-the-art
analyses – although as we've seen above even just Stats 101 would sometimes do the trick.

This essay by John Kay excerpted below is a very nice summary of the problem we have in modern
economics. It is a bit dry to the layman, but it touches on the distortions that crept in to economic
thought and their intellectual sources and in particular the operational rather than political means.

I do not think it was unintentional. Economics served to distort public policy and blind people
to unfolding reality. Investments in think tanks and universities encouraged and paid for misleading
reports and studies, draping propaganda in the robes of respectable academia and faux science.

This is certainly not the first time this sort of thing has happened. Medicine has a rather checkered
history in service to power. These types of distortions can of course cut both ways, and science
has been used to justify abuses from all ends of the political spectrum.

The concept to remember then, is that economics and other sciences are no substitutes for public
policy. Policy is not an outcome of economic science, but rather, policy is set and renewed from
first principles, a commitment to certain ideals and common objectives. Economics and other sciences
do play a role in shaping the details of implementation. But we must revisit and determine the effect
which those details have on the achievement of first principles.

Unfortunately we must sift those inputs with care, and especially the assumptions on which they
are based, because the professions have shown a willingness to misrepresent, distort, and even lie
for money and power.

One must always come back to first principles, to some notion of what they, and by extension
their community, wish to be. Is the first principle of the US the maximizing of profit? By what
measures, and to whom? Or is it something else again.

This is the question that the protesters of Occupy Wall Street are asking. People of the status
quo say, 'What do they want? What is their solution?' No, it is they who are asking the question
of those comfortable people in power. If they have any statement to make, it is 'The Emperor
has no clothes.'

And since the modern day Emperors do not wish to answer the people plainly and honestly, having
only their tired old lies, they become uncomfortable and afraid. Instead they ignore, ridicule,
and silence the question, offering new lies and scapegoats, claiming all is well. And it is, at
least for them.

If the people are ignored and abused long enough they will stop asking questions and begin to
make their demands and push them forward, and then it may be too late as these things obtain their
own momentum.

Economics is a discredited science at the moment. A few practitioners sold its soul and honor
to a small group of wealthy ideologues while the great majority remained silent. But certainly no
more discredited than the doctors who served the policies of euthanasia or the Russian abuse of
psychiatric wards. And when the destroyers appear on the horizon, the mechanical sciences and their
industrialists are generally seen swimming out to meet the boats.

But a caution is that those who promoted false theories for power and money in the service of
crony capitalism are still at work, and the results are more difficult to see than piles of dead
bodies, or rooms full of broken individuals.

The answer is not to turn away from knowledge, and embrace a hatred of science promoted by a
new crop of passionate know-nothings, although that also is a recurrent historical theme, and a
phenomenon already evident as a minority theme in the world of politics and a certain status quo.
In this modern age they not only have their own magazine but television channels as well.

Science has its proper place. But it is not at the top, dictating outcomes in the social world
like the answers to irrefutable equations. And it is especially good that we remember this when
science is abused, and used to justify cruelty, selfishness, and plunder.

"The preposterous claim that deviations from market efficiency were not only irrelevant to the
recent crisis but could never be relevant is the product of an environment in which deduction
has driven out induction and ideology has taken over from observation.

The belief that models are not just useful tools but also are capable of yielding comprehensive
and universal descriptions of the world has blinded its proponents to realities that have been
staring them in the face. That blindness was an element in our present crisis, and conditions
our still ineffectual responses.

Economists – in government agencies as well as universities – were obsessively playing Grand
Theft Auto while the world around them was falling apart."

This intellectual and financial decline traces back perhaps to the closing of the gold window by
Nixon, and the rise of the willful relativism of value with fiat money. But more important
is the subsequent rise of the financialization industry, under the flag of efficient markets and
deregulation and globalization.

The country became gripped by a preoccupation with aggregating wealth from the real economy by
manipulating paper. Not only were their real direct effects, but there were profound long term effects
through the malinvestment and diversion of strategic resources. And the absolute worst
of it has come from the corporations and those who serve them.

"The best and brightest went into finance because... it paid better than every other profession.
So we had this whole generation of people — who would have been great scientists, great doctors,
great creators of other things — attracted to a business which ultimately only provided, to
a substantial degree, toxic waste. And that is the tragedy of our time. ... It was this diversion
of enormous amounts of talent."

People can point to select innovations like Facebook and the iPod, but in fact America's technical
and physical infrastructure has been distorted and has languished because public policy unleashed
the financiers, the money magicians, and then became captive to them. And they have willfully led
their people into a lingering period of decline.

I hope to have no illusions. Those who
give themselves over to the dark impulses of their imagination often prove more impervious to reason
with each victory. At some point they are blooded, and it is then they make the decision whether
to come back to their senses, or go forward to the bitter end. And in their pathological delusion
they might continue to reaffirm their perceived advantages, and mythological self, while standing
in the ruins, or on a scaffold, or as they are about to end their bitter compulsions in a bunker.

But there is room for optimism. The ordinary people are starting to wake up and come out of their
slumber, most notably in the Occupy Wall Street phenomenon. And a number of eminent economists like
Thoma, Krugman and Stiglitz are putting forward principled stands for meaningful reform and constructive
change for the better. It is the minority that is the problem, because of the silence of the majority
which is always slow to stir.

No one knows how this will turn out yet. There is always hope against forces that seem far too
powerful at the moment. And tyranny is always better organized than freedom.

At the worst, some day this entire episode may be expressed by those who write history for the
young as the madness of the ignorant crowd, acting foolishly despite the best efforts of their leaders
and intellectuals to restrain them.

Some inquisitive student may find this little morsel of thought, and his mind will be provoked,
and a flickering light of truth will be struck from that spark, to caution ordinary people about
the imperfections and corruptibility of even the best, the dark hearts of predators who walk unseen
among us, and the danger of too much power in too few hands.

And if not now, then perhaps in some better tomorrow. Nothing is ever wasted in God's economy.

Soon after GE started production of the type of reactors found in Fukushima, the Mark 1 type
reactors, American regulators discovered serious weaknesses. Already in 1972, Stephen H. Hanauer,
a safety official with the Atomic Energy Commission, said that the Mark 1 system should be banned.
There were a number of concerns, but the greatest problem was that he found that the smaller
containment design is too susceptible to explosion and rupture from a buildup of hydrogen. This
is exactly what now has happened at Fukushima Daiichi. Moreover it was warned already in 1972,
that if a Mark 1 reactor's cooling system failed, the fuel rods would overheat and, because
of this, the primary containment vessel surrounding the reactor would burst, spilling radiation
into the environment. That is exactly what now happened at the Fukushima Daiichi nuclear plant.

General Electric however ignored these warnings. They denied that the reactors were unsafe
and continued to produce these reactors. Obviously they were wrong and the question is whether
they made an error of judgment or very well knew that the reactors were unsafe but still continued
production.

In the late 1980s, Mark 1 reactors in the United States were retrofitted with venting systems.
Their purpose is to help ease pressure in overheating situations, after Harold Denton, an expert
at the Nuclear Regulatory Committee, warned that Mark 1 reactors had a 90 percent probability
of bursting if the fuel rods were to overheat and melt in an accident. This exactly what happened
in Japan, so the question is if the Japanese reactors were not retrofitted. If so, in my opinion,
a heavy burden falls on General Electric.

David Lochbaum from the Union of Concerned Scientists testified today before the Senate Energy
and Natural Resources Committee.

Ponder this from his statement:

"And I cannot emphasize enough that the lessons from Japan apply to all US reactors, but
just the boiling water reactors like those affected at Fukushima. None are immune to station
blackout problems. All must be made less vulnerable to those problems."

and

"Eleven US reactors are designed to cope with a station blackout lasting eight hours, as
were the reactors in Japan. Ninety-three of our reactors are designed to cope for only four
hours."

It doesn't take an earthquake followed by a tsunami, all it takes is for the electricity
to go out.

Ron

I live in Tokyo and would like to comment that this article is factually incorrect. It states
"a plant ravaged by a magnitude 9.0 earthquake." The 9.0 earthquake occurred far out at sea,
and the coastal areas where the reactors are experienced a 6+ or 7 earthquake. On a logarithmic
scale this is a hundred times different. Please get your facts straight.

When the Fukushima Meltdown Hits Groundwater March 27, 2011 By Dr. Tom Burnett

... ... ...

Fukushima was waiting to happen because of the placement of the emergency generators. If
they had not all failed at once by being inundated by a tsunami, Fukushima would not have happened
as it did – although it WOULD still have been a nuclear disaster. Every containment in the world
is built to withstand a Magnitude 6.9 earthquake; the Japanese chose to ignore the fact that
a similar earthquake had hit that same general area in 1896.

Anyway, here is the information that the US doesn't seem to want released. And here is a
chart that might help with perspective.

Making matters worse is the MOX in reactor 3. MOX is the street name for 'mixed oxide fuel'
which uses ~9% plutonium along with a uranium compound to fuel reactors. This is why it can
be used.

The problem is that you don't want to play with this stuff. A nuclear reactor means bring
fissile material to a point at which it is hot enough to boil water (in a light-water reactor)
and not enough to melt and go supercritical (China syndrome or a Chernobyl incident). You simply
cannot let it get away from you because if it does, you can't stop it.

Due to importance and the possibility that thee article will disappear from the Web it is reproduced
entirely...

May 23, 2004 | The Japan Times

Of all the places in all the world where no one in their right mind would build scores of nuclear
power plants, Japan would be pretty near the top of the list.

An aerial view of the Hamaoka plant in Shizuoka Prefecture, "the most dangerous nuclear
power plant in Japan"

The Japanese archipelago is located on the so-called Pacific Rim of Fire, a large active volcanic
and tectonic zone ringing North and South America, Asia and island arcs in Southeast Asia. The major
earthquakes and active volcanoes occurring there are caused by the westward movement of the Pacific
tectonic plate and other plates leading to subduction under Asia.

Japan sits on top of four tectonic plates, at the edge of the subduction zone, and is in one
of the most tectonically active regions of the world. It was extreme pressures and temperatures,
resulting from the violent plate movements beneath the seafloor, that created the beautiful islands
and volcanoes of Japan.

Nonetheless, like many countries around the world -- where General Electric and Westinghouse
designs are used in 85 percent of all commercial reactors -- Japan has turned to nuclear power as
a major energy source. In fact the three top nuclear-energy countries are the United States, where
the existence of 118 reactors was acknowledged by the Department of Energy in 2000, France with
72 and Japan, where 52 active reactors were cited in a December 2003 Cabinet White Paper.

The 52 reactors in Japan -- which generate a little over 30 percent of its electricity
-- are located in an area the size of California, many within 150 km of each other and almost all
built along the coast where seawater is available to cool them.

However, many of those reactors have been negligently sited on active faults, particularly in
the subduction zone along the Pacific coast, where major earthquakes of magnitude 7-8 or more on
the Richter scale occur frequently. The periodicity of major earthquakes in Japan is less than 10
years. There is almost no geologic setting in the world more dangerous for nuclear power than Japan
-- the third-ranked country in the world for nuclear reactors.

"I think the situation right now is very scary," says Katsuhiko Ishibashi, a seismologist and
professor at Kobe University. "It's like a kamikaze terrorist wrapped in bombs just waiting to explode."

Last summer, I visited Hamaoka nuclear power plant in Shizuoka Prefecture, at the request of
citizens concerned about the danger of a major earthquake. I spoke about my findings at press conferences
afterward.

A map of Japan annotated by the author, showing the tectonic plates, areas of high ("observed
region") and very high ("specially observed") quake risk, and the sites of nuclear reactors

Because Hamaoka sits directly over the subduction zone near the junction of two plates, and is
overdue for a major earthquake, it is considered to be the most dangerous nuclear power plant in
Japan.

Together with local citizens, I spent the day walking around the facility, collecting rocks,
studying the soft sediments it sits on and tracing the nearly vertical faults through the area --
evidence of violent tectonic movements.

The next day I was surprised to see so many reporters attending the two press conferences held
at Kakegawa City Hall and Shizuoka Prefecture Hall. When I asked the reporters why they had come
so far from Tokyo to hear an American geoscientist, I was told it was because no foreigner had ever
come to tell them how dangerous Japan's nuclear power plants are.

I told them that this is the power of gaiatsu (foreign pressure), and because citizens
in the United States with similar concerns attract little media attention, we invite a Japanese
to speak for us when we want media coverage -- someone like the famous seismologist Professor Ishibashi!

When the geologic evidence was presented confirming the extreme danger at Hamaoka, the attending
media were obviously shocked. The aerial map, filed by Chubu Electric Company along with its government
application to build and operate the plant, showed major faults going through Hamaoka, and revealed
that the company recognized the danger of an earthquake. They had carefully placed each reactor
between major fault lines.

"The structures of the nuclear plant are directly rooted in the rock bed and can tolerate a quake
of magnitude 8.5 on the Richter scale," the utility claimed on its Web site.

From my research and the investigation I conducted of the rocks in the area, I found that that
the sedimentary beds underlying the plant were badly faulted. Some tiny faults I located were less
than 1 cm apart.

When I held up samples of the rocks the plant was sitting on, they crumbled like sugar in my
fingers. "But the power company told us these were really solid rocks!" the reporters said. I asked,
"Do you think these are really solid?' and they started laughing.

On July 7 last year, the same day of my visit to Hamaoka, Ishibashi warned of the danger of an
earthquake-induced nuclear disaster, not only to Japan but globally, at an International Union of
Geodesy and Geophysics conference held in Sapporo. He said: "The seismic designs of nuclear
facilities are based on standards that are too old from the viewpoint of modern seismology and are
insufficient. The authorities must admit the possibility that an earthquake-nuclear disaster could
happen and weigh the risks objectively."

After the greatest nuclear power plant disaster in Japan's history at Tokai, Ibaraki Prefecture,
in September 1999, large, expensive Emergency Response Centers were built near nuclear power plants
to calm nearby residents.

After visiting the center a few kilometers from Hamaoka, I realized that Japan has no real
nuclear-disaster plan in the event that an earthquake damaged a reactor's water-cooling system and
triggered a reactor meltdown.

Additionally, but not even mentioned by ERC officials, there is an extreme danger of an
earthquake causing a loss of water coolant in the pools where spent fuel rods are kept.
As reported last year in the journal Science and Global Security, based on a 2001 study by the U.S.
Nuclear Regulatory Commission, if the heat-removing function of those pools is seriously compromised
-- by, for example, the water in them draining out -- and the fuel rods heat up enough to combust,
the radiation inside them will then be released into the atmosphere. This may create a nuclear disaster
even greater than Chernobyl.

If a nuclear disaster occurred, power-plant workers as well as emergency-response personnel in
the Hamaoka ERC would immediately be exposed to lethal radiation. During my visit, ERC engineers
showed us a tiny shower at the center, which they said would be used for "decontamination' of personnel.
However, it would be useless for internally exposed emergency-response workers who inhaled radiation.

When I asked ERC officials how they planned to evacuate millions of people from Shizuoka Prefecture
and beyond after a Kobe-magnitude earthquake (Kobe is on the same subduction zone as Hamaoka) destroyed
communication lines, roads, railroads, drinking-water supplies and sewage lines, they had no answer.

Last year, James Lee Witt, former director of the U.S. Federal Emergency Management Agency, was
hired by New York citizens to assess the U.S. government's emergency-response plan for a nuclear
power plant disaster. Citizens were shocked to learn that there was no government plan adequate
to respond to a disaster at the Indian Point nuclear reactor, just 80 km from New York City.

The Japanese government is no better prepared, because there is no adequate response possible
to contain or deal with such a disaster. Prevention is really the only effective measure to consider.

In 1998, Kei Sugaoka, 51, a Japanese-American senior field engineer who worked for General Electric
in the United States from 1980 until being dismissed in 1998 for whistle-blowing there, alerted
Japanese nuclear regulators to a 1989 reactor inspection problem he claimed had been withheld by
GE from their customer, Tokyo Electric Power Company. This led to nuclear-plant shutdowns and reforms
of Japan's power industry.

Later it was revealed from GE documents that they had in fact informed TEPCO -- but that company
did not notify government regulators of the hazards.

Yoichi Kikuchi, a Japanese nuclear engineer who also became a whistle-blower, has told me personally
of many safety problems at Japan's nuclear power plants, such as cracks in pipes in the cooling
system from vibrations in the reactor. He said the electric companies are "gambling in a dangerous
game to increase profits and decrease government oversight."

Sugaoka agreed, saying, "The scariest thing, on top of all the other problems, is that all nuclear
power plants are aging, causing a deterioration of piping and joints which are always exposed to
strong radiation and heat."

Like most whistle-blowers, Sugaoka and Kikuchi are citizen heroes, but are now unemployed.

The Radiation and Public Health Project, a group of independent U.S. scientists, has collected
4,000 baby teeth from children living around nuclear power plants. These teeth were then tested
to determine their level of Strontium-90, a radioactive fission product that escapes in nuclear
power plant emissions.

Unborn children may be exposed to Strontium-90 through drinking water and the diet of the mother.
Anyone living near nuclear power plants is internally exposed to chronically low levels of radiation
contaminating food and drinking water. Increased rates of cancer, infant mortality and low birth
weights leading to cognitive impairment have been linked to radiation exposure for decades.

However, a recent independent report on low-level radiation by the European Committee on Radiation
Risk, released for the European Parliament in January 2003, established that the ongoing U.S. Atomic
and Hydrogen Bomb Studies conducted in Japan by the U.S. government since 1945 on Hiroshima and
Nagasaki survivors underestimated the risk of radiation exposure as much as 1,000 times.

Additionally, on March 26 this year -- the eve of the 25th anniversary of the worst nuclear disaster
in U.S. history, at the Three Mile Island plant in Pennsylvania -- the Radiation and Public Health
Project released new data on the effects of that event. This showed rises in infant deaths up to
53 percent, and in thyroid cancer of more than 70 percent in downwind counties -- data which, like
all that concerning both the short- and long-term health effects, has never been forthcoming from
the U.S. government.

It is not a question of whether or not a nuclear disaster will occur in Japan; it is a question
of when it will occur.

Like the former Soviet Union after Chernobyl, Japan will become a country suffering from radiation
sickness destroying future generations, and widespread contamination of agricultural areas will
ensure a public-health disaster. Its economy may never recover.

Considering the extreme danger of major earthquakes, the many serious safety and waste-disposal
issues, it is timely and urgent -- with about half its reactors currently shut down -- for Japan
to convert nuclear power plants to fossil fuels such as natural gas. This process is less expensive
than building new power plants and, with political and other hurdles overcome, natural gas from
the huge Siberian reserves could be piped in at relatively low cost. Several U.S. nuclear plants
have been converted to natural gas after citizen pressure forced energy companies to make changeovers.

Commenting on this way out of the nuclear trap, Ernest Sternglass, a renowned U.S. scientist
who helped to stop atmospheric testing in America, notes that, 'Most recently the Fort St. Vrain
reactor in Colorado was converted to fossil fuel, actually natural gas, after repeated problems
with the reactor. An earlier reactor was the Zimmer Power Plant in Cincinnati, which was originally
designed as a nuclear plant but it was converted to natural gas before it began operating. This
conversion can be done on any plant at a small fraction [20-30 percent] of the cost of building
a new plant. Existing turbines, transmission facilities and land can be used."

After converting to natural gas, the Fort St. Vrain plant produced twice as much electricity
much more efficiently and cheaply than from nuclear energy -- with no nuclear hazard at all, of
course.

It is time to make the changeover from nuclear fuel to fossil fuels in order to save future generations
and the economy of Japan.

Leuren Moret is a geoscientist who worked at the Lawrence Livermore Nuclear Weapons Laboratory
on the Yucca Mountain Project, and became a whistle-blower in 1991 by reporting science fraud on
the project and at Livermore. She is an independent and international radiation specialist, and
the Environmental Commissioner in the city of Berkeley, Calif. She has visited Japan four times
to work with Japanese citizens, scientists and elected officials on radiation and peace issues.
She can be contacted at leurenmoret@yahoo.com

While in discussion of Japan nuclear disaster we all are out of depth, and the facts on the ground
are difficult to interpret even for specialists it is important to avoid radiophobia and do not
propagate it consciously or unconsciously. .

From pure scientific perspective in no way Japan in 2011 situation is close to Chernobyl (no
burning graphite on site) and I think that progress is sufficient to state that full meltdown was
avoided.

Now the main danger I think is spreading panic not so much temporary spike in actual radiation.

Information available is distorted due to extremely low level of understanding of the nature
of ionizing radiation (which is not uniform and consists of three different types).

The problem of radioactive contamination of food chain (also with several pretty different sources
with different half-life periods) is a completely separate problem which is not that different from
presence of dioxin, lead, and other heavy metals in food and water. I think many people who post
here do not understand the danger of typical levels of radon in basements of NJ and NY and happy
go there to do laundry and other household chores on a regular basis.

After all US high schools eliminated physics as a separate subject :-)

Please remember that physicists like Marie Curie, Ernest Rutherford and many others worked with
radioactive materials without any precautions and none of them died quickly. Also people forget
about lake Karachay problem (
http://en.wikipedia.org/wiki/Lake_Karachay
).

Also the whole planet is contaminated with Caesium-137 (hal-life 30 years) due to atmospheric
nuclear testing in 1946-1963, while some parts of the USA territory are additionally contaminated
with very toxic DU powder (perfect dirty bomb component) from DU weapons testing (http://vzajic.tripod.com/5thchapter.html).
There was pretty telling incident in which Caesium-137 was distributed (http://en.wikipedia.org/wiki/Goi%C3%A2nia_accident).
I think reading this description of human propagated Caesium-137 dirty bomb is enough to stop fear
mongering about Japan case.

BTW after 1954 the Castle Bravo radioactive fallout (http://en.wikipedia.org/wiki/Castle_Bravo)
one member of the Japaneses fishing boat crew which was in the area died from radiation sickness
after returning to the port. So high levels of contamination of both atmosphere and the ocean are
not new. BTW there are life forms that learned to use radiation as energy source and live inside
Chernobyl sarcophagus.

But panic is deadly and can cause immediate harm to both physical and mental health.

I think that in this particular forum poster under nickname "Maju" can serve as a field manual
to this type of phobia. (see for example the statement "As far as I know there
was a 40% increase in deadly cancers in Belarus after the Chernobyl accident.". Is not this blatant
fear mongering ? What is the source of this figure??? ).

This looks like a pretty widespread, dangerous phobia propagated with the help of MSM and I would
advocate extreme restraint in related statements especially from non-specialists.

Panic is really deadly. And fear mongering about Japan nuclear disaster is really dangerous and
dishonest: some people already hurt themselves by taking excessive amount iodine pills (they were
swiped from the shelves). And this is just a start. A lot of crazy things is going on with this
mass radiophobia hysteria that swiped the USA (and not only the USA).

Is this a tragedy. Yes. But lessons learned from it as lessons learned from Chernobyl disaster
will increase safety of existing power plants dramatically.

How dangerous is it?. Below level of Chernobyl and influence is by-and-large local. So it is
potentially dangerous to Japanese people in the evacuation zone and, especially, workers at the
plant. But is this like Chernobyl? No way (amount of radioactive materials released is many times
less; absence of burning graphite is the major difference here). After all Japan is an island nation.
Not something in the heart of Europe.

Reaction to radiation like reaction of other types of poisoning is highly individual. Some people
who were present in control room in Chernobyl are still alive:

Yuri Korneev, Boris Stolyarchuk and Alexander Yuvchenko are the last surviving members of
the Reactor No. 4 shift that was on duty at the moment of the catastrophe. Anatoly Dyatlov,
who was in charge of the safety experiment at Reactor No. 4, died in 1995 of a heart attack.

High end estimate of the death rate among people who tried to contain Chernobyl disaster (liquidators)
and got high or extremely high doses is 10%. That is not that different from natural death rate.

According to Vyacheslav Grishin of the Chernobyl Union, the main organization of liquidators,
"25,000 of the Russian liquidators are dead and 70,000 disabled, about the same in Ukraine,
and 10,000 dead in Belarus and 25,000 disabled", which makes a total of 60,000 dead (10% of
the 600 000, liquidators) and 165,000 disabled.[2]

In 2003 there were 6,328,000 car accidents in the US. There were 2.9 million injuries and 42,643
people were killed in auto accidents.

In 2002, there were an estimated 6,316,000 car accidents in the USA. There were about 2.9 million
injuries and 42,815 people were killed in auto accidents in 2002.

There were an estimated 6,356,000 car accidents in the US in 2000. There were about 3.2 million
injuries and 41,821 people were killed in auto accidents in 2000 based on data collected by the
Federal Highway Administration

As far as I know there were no radiation related death cases for this disaster. So irresponsible
fear mongering that heats this mass radiophobia hysteria should be avoided.

A fellow senior sciences professor at Overton's own LSU, also noted that Overton "does not appear
to be an unbiased source of information" and found it laughable that the head of NOAA's chemical
hazard assessment team is purporting to provide public comments as an "independent scientist."

"I think that Dr. Overton comes across as being an industry shill," the professor offered bluntly.
"He has never said anything that was not in favor of what the industry was saying and continued
to minimize the effects from day one about how bad this spill and its effects would be."

readerOfTeaLeaves:

Additionally, as professor emeritus, Overton confirmed to Raw Story that he officially
retired from LSU and no longer receives a salary from the university; all his income tied to
his university association since May 2009 has come through grants and contracts, and mostly
through his work for NOAA. The latest NOAA funding for his work was a $1.3 million five-year
grant.

Prof. Overton fools himself if he believes that his LSU connections have nothing to do with
his ability to obtain funding. Just because he no longer receives an LSU salary does not in
any way imply that he no longer benefits from the association. His self-serving excuse does
no credit to him.

dan:

So what's new?

How many financial reports extolling the safety of derivatives or the financial health of
whole countries have been written by paid shills from the universities in the U.S.?

Go see the movie "Inside Job" if you get a chance, read Yves or Nomi Prins books. This country
is in the hands of traitors and thieves, and the above is just one more in a long line of transgressions
that we are letting them get away with.

Because:
a) The behaviors of some corporations, PR agencies, product defense organizations can get somewhat
redundant. Hill & Knowlton created the tactics 50+ years ago and they've been widely employed.

b) But the legal issues in these two Chapters represent relatively recent…

You do know, of course, that the same George C. Marshall Institute (GMI) was a key player
in recruiting McKitrick, and then McIntyre. They helped pay for trips to Washington, sponsored
talks, coached them, introduced them to Singer, Baliunas, Soon, Michaels ... and James Inhofe.
They publicized them. They made them GMI "experts." in 2004. example.

So, if you thought "Merchants" was interesting for the history, see the following, which
focuses more on the later years, especially the well-orchestrated attack on the hockey stick
and Michael Mann, which started as soon as the IPCC TAR came out.

All this was actually part of strategy organized in 1998 by the American Petroleum Institute,
with GMI, CEI, Fred Singer, etc. Follow the funding trails, etc, etc.

Buried deep in the anus of the Bible Belt, in a little place called Petersburg, Kentucky, is
one of the world's most extraordinary tourist attractions: the Creation Museum, a kind of natural-history
museum for people who believe the Earth is 6,000 years old. When you visit this impressively massive
monument to fundamentalist Christian thought, you get a mind-blowing glimpse into the modern conservative
worldview. One exhibit depicts a half-naked Adam and Eve sitting in the bush, cheerfully keeping
house next to dinosaurs — which, according to creationist myth, not only lived alongside humans
but were peaceful vegetarians until Adam partook of the forbidden fruit. It's hard to imagine a
more telling demonstration of this particular demographic's unmatched ability to believe just about
anything.

Even more disturbing is an exhibit designed to show how the world has changed since the Scopes
trial eradicated religion from popular culture. Visitors to the museum enter a darkened urban scene
full of graffiti and garbage, and through a series of windows view video scenes of families in a
state of collapse. A teenager, rolling a giant doobie as his God-fearing little brother looks on
in horror, surfs porn on the Web instead of reading the Bible. ("A Wide World of Women!" the older
brother chuckles.) A girl stares at her home pregnancy test and says into the telephone, "My parents
are not going to know!" As you go farther into the exhibit, you find a wooden door, into which an
eerie inscription has been carved: "The World's Not Safe Anymore."

Staff members tell me Rand Paul recently visited the museum after-hours. This means nothing in
itself, of course, but it serves as an interesting metaphor to explain Paul's success in Kentucky.
The Tea Party is many things at once, but one way or another, it almost always comes back to a campaign
against that unsafe urban hellscape of godless liberalism we call our modern world. Paul's platform
is ultimately about turning back the clock, returning America to the moment of her constitutional
creation, when the federal bureaucracy was nonexistent and men were free to roam the Midwestern
plains strip-mining coal and erecting office buildings without wheelchair access. Some people pick
on Paul for his humorously extreme back-to-Hobbesian-nature platform (a Louisville teachers' union
worker named Bill Allison follows Paul around in a "NeanderPaul" cave-man costume shouting things
like "Abolish all laws!" and "BP just made mistakes!"), but it's clear when you talk to Paul supporters
that what they dig most is his implicit promise to turn back time, an idea that in Kentucky has
some fairly obvious implications.

'You have to decide who you trust before you decide what to believe.'
Photo: Donald Milne

For a while there, things didn't look too good for British writer Simon Singh.
The best-selling author of the science histories Big Bang and Fermat's
Enigma knew he was heading into controversial territory when he switched tracks to cowrite
a book investigating alternative medicine,
Trick or Treatment? What Singh didn't count on, however, was that writing a seemingly
innocuous article for London's The Guardian newspaper about especially outrageous chiropractic
claims—one of the subjects he researched for the book—would end up threatening his career. The British
Chiropractic Association sued Singh, hoping to use Britain's
draconian libel
laws to force him to withdraw his statements and issue an apology. Losing the case would have cost
Singh both his reputation and a substantial amount of his personal wealth. Such is the state of
science, where sometimes even stating simple truths (like the fact that there's no reliable evidence
chiropractic can alleviate asthma in children) can bring the wrath of the antiscience crowd. What
the British chiropractors didn't count on, however, was Singh himself. Having earned a PhD from
Cambridge for his work at the Swiss particle physics lab CERN, he wasn't about to back down from
a scientific gunfight. Singh spent more than two years and well over $200,000 of his own money battling
the case in court, and this past April he finally prevailed. In the process, he became a hero to
those challenging the pseudoscience surrounding everything from global warming to vaccines to evolution.
It's not necessarily a role he sought for himself, but it's one he has embraced—he's currently touring
the world, talking about his case, libel reform, and how important it is to make sure scientists
can speak truthfully and openly. Wired spoke with Singh about his case and the struggle
against the forces of irrationality.

Wired: The British Chiropractic Association wanted you to apologize for your
Guardian
article. Why didn't you? What would that have meant?

Simon Singh: It would have meant that whenever somebody typed "Simon Singh"
into a Web search, it would say, "science journalist found guilty of libel." People could dismiss
anything I'd ever written about alternative medicine. But more important, it would have implied
that there is some validity to these claims that chiropractic can help with things like asthma and
colic. And that would have an impact on parents and their children. Faced with that, I couldn't
apologize. If you've written something that you believe is true, and if you can afford to defend
it, then you've got to defend it.

Wired: Do you think that this is part of a broader trend? Is science under assault?

Simon Singh: What shocks me is people who have no expertise championing a view
that runs counter to the mainstream scientific consensus. For example, we have a consensus amongst
the best medical researchers in the world—the leading authorities and the
World Health Organization—that
vaccines are a good thing, and that MMR, the triple vaccine, is a really good thing. And yet there
are people who are quite willing to challenge that consensus—film stars, celebrities, columnists—all
of whom rely solely on the tiny little bit of science that seems to back up their view.

Wired: Yet the celebrities sometimes seem to be winning.

Simon Singh: Part of the problem is that if anybody has a gut reaction about
an issue, they can go online and have it backed up. That said, they can also find support for their
ideas in the mainstream media—because when the mainstream media gives a so-called balanced view,
it's often misleading. The media thinks that because one side says climate change is real and dangerous,
the other view is that it's not real and not dangerous. That doesn't reflect the fact that something
like 98 percent of climate scientists agree that global warming is real and dangerous. And
this happens with everything from genetically modified foods to evolution. But, at the end of the
day, all that this misinformation does is slow progress—it doesn't stop it. Antiscientific and pseudoscientific
attitudes will get corrected; it's just a question of how painful that process is going to be.

Wired: Should scientists do more to get real science out there?

Simon Singh: Scientists aren't necessarily good communicators, because they
aren't trained to be good communicators. A researcher could be doing really important work on global
warming, and then somebody writes a column in a national newspaper that completely undermines what
they're saying. But the scientist doesn't think the column is important—it's just some nincompoop
writing a column—so they don't take that writer to task in the way they should. It's a case of saying,
"How do we make a difference?" We certainly don't make a difference by just moaning over coffee
the next day.

Wired: What about nonscientists? How are we supposed to know what's true?

Simon Singh: Don't come up with a view, find everybody who agrees with it, and
then say, "Look at this, I must be right." Start off by saying, "Who do I trust?" On global warming,
for example, I happen to trust climate experts, world academies of science, Nobel laureates, and
certain science journalists. You have to decide who you trust before you decide what to believe.

Wired: Why is it so hard to convince people, even when the science is so clear?

Simon Singh: Science has nothing to do with common sense. I believe it
was Einstein who said that common sense is a set of prejudices we form by the age of 18.
Inject somebody with some viruses and that's going to keep you from getting sick? That's not common
sense. We evolved from single-cell organisms? That's not common sense. By driving my car I'm going
to cook Earth? None of this is common sense. The commonsense view is what we're fighting against.
So somehow you've got to move people away from that with these quite complicated scientific arguments
based on even more complicated research. That's why it's such an uphill battle. People start off
with a belief and a prejudice—we all do. And the job of science is to set that aside to get to the
truth.

Articles editor Robert Capps (rcapps@wired.com)
wrote about the advantages of "good enough" technology in issue 17.09.

You might think that modern chiropractors restrict themselves to treating back problems, but
in fact they still possess some quite wacky ideas. The fundamentalists argue that they can cure
anything. And even the more moderate chiropractors have ideas above their station. The British Chiropractic
Association claims that their members can help treat children with colic, sleeping and feeding problems,
frequent ear infections, asthma and prolonged crying, even though there is not a jot of evidence.
This organisation is the respectable face of the chiropractic profession and yet it happily promotes
bogus treatments.

I can confidently label these treatments as bogus because I have co-authored a book about alternative
medicine with the world's first professor of complementary medicine, Edzard Ernst. He learned chiropractic
techniques himself and used them as a doctor. This is when he began to see the need for some critical
evaluation. Among other projects, he examined the evidence from 70 trials exploring the benefits
of chiropractic therapy in conditions unrelated to the back. He found no evidence to suggest that
chiropractors could treat any such conditions.

But what about chiropractic in the context of treating back problems? Manipulating the spine
can cure some problems, but results are mixed. To be fair, conventional approaches, such as physiotherapy,
also struggle to treat back problems with any consistency. Nevertheless, conventional therapy is
still preferable because of the serious dangers associated with chiropractic.

In 2001, a systematic review of five studies revealed that roughly half of all chiropractic patients
experience temporary adverse effects, such as pain, numbness, stiffness, dizziness and headaches.
These are relatively minor effects, but the frequency is very high, and this has to be weighed against
the limited benefit offered by chiropractors.

More worryingly, the hallmark technique of the chiropractor, known as high-velocity, low-amplitude
thrust, carries much more significant risks. This involves pushing joints beyond their natural range
of motion by applying a short, sharp force. Although this is a safe procedure for most patients,
others can suffer dislocations and fractures.

Worse still, manipulation of the neck can damage the vertebral arteries, which supply blood to
the brain. So-called vertebral dissection can ultimately cut off the blood supply, which in turn
can lead to a stroke and even death. Because there is usually a delay between the vertebral dissection
and the blockage of blood to the brain, the link between chiropractic and strokes went unnoticed
for many years. Recently, however, it has been possible to identify cases where spinal manipulation
has certainly been the cause of vertebral dissection.

Laurie Mathiason was a 20-year-old Canadian waitress who visited a chiropractor 21 times between
1997 and 1998 to relieve her low-back pain. On her penultimate visit she complained of stiffness
in her neck. That evening she began dropping plates at the restaurant, so she returned to the chiropractor.
As the chiropractor manipulated her neck, Mathiason began to cry, her eyes started to roll, she
foamed at the mouth and her body began to convulse. She was rushed to hospital, slipped into a coma
and died three days later. At the inquest, the coroner declared: "Laurie died of a ruptured vertebral
artery, which occurred in association with a chiropractic manipulation of the neck."

This case is not unique. In Canada alone there have been several other women who have died after
receiving chiropractic therapy, and Professor Ernst has identified about 700 cases of serious complications
among the medical literature. This should be a major concern for health officials, particularly
as under-reporting will mean that the actual number of cases is much higher.

Bearing all of this in mind, I will leave you with one message for Chiropractic Awareness Week
- if spinal manipulation were a drug with such serious adverse effects and so little demonstrable
benefit, then it would almost certainly have been taken off the market.

· Simon Singh is the co-author of Trick or Treatment? Alternative Medicine on
Trial www.simonsingh.net

"So true. As a working research scientist I can tell you that people believe scientists wouldn't
alter results to advance their careers and receive more funding and recognition. But this is very naive
as this happens all the time. Corruption and misuse of funds is rampant especially at large national
laboratories where power is concentrated."

Cognitive Dissonance:

It makes me laugh/cry to see that it took them 25 years to come to the conclusion that lease
accounting was being abused.

Bruce, the biggest failing we as honest and caring humans have is that we don't (wish to)
have the capacity of the psychopathic personality. In other words, because we don't want to
be a thief (well maybe not a large one) we don't think like a thief. And while we "know" there
are thieves out there, we still approach the world on a daily basis assuming the thieves are
only 2 or 3 % of the population.

And you would be correct to think so. OK, maybe 5%. But where we really go off the
tracks is in assuming the regulators are at least trying to do their job. This is where
we are raped and pillaged.

There is no reason for the regulators to be as incompetent and incapable as they consistently
are unless it's intended to be this way. It's that simple. And there are hundreds of
ways for the powers that be to place roadblock after roadblock in front of the regulators while
still making it look like they aren't doing so. Why do you think the recent finreg bill was
over 2,000 pages long?

The entire concept of regulators is that they are there simply to keep the honest people
coming back to the dice table and the thieves coming to the same table to take advantage of
the honest people. The regulators are there to keep selected competition out of "the game" as
well as to look the other way when "da playas" are at the table. No more, no less.

Thus if the regulators are just now "discovering" something 25 years later, it's clear that
"da playas" have a new game in town and they need to fleece the last of the honest money one
more time and then make sure their enemies......er....irritating mosquitoes are caught and locked
up for playing a game that's being retired soon for the next best thing.

Pardon my cynical slip for showing.

Mitchman

CD, in this case, the regulators are actually following the rules to the letter. Most lease
accounting in the US is based on FASB 13 which, I believe dates back to the late 1950's or early
1960's. Everyone is going by the book in this case and although there have been some attempts
at changing the rules, they have been half-hearted, partially because everyone has felt that
the rules of the game have been working so well for everyone involved.

Cognitive Dissonance:

I agree. Let me quote myself from above.

And there are hundreds of ways for the powers that be to place roadblock after roadblock
in front of the regulators while still making it look like they aren't doing so. Why do you
think the recent finreg bill was over 2,000 pages long?

I agree, in this case everyone's going by the book because the book is written to allow the
thieving. Oh sure, there really are rules and regs to keep things from completely getting out
of hand. After all, there must be rules. BUT the rules are written to favor the few at the expense
of the many. And without being insulting in the least to you my friend, most people can't see
this fact because they are immersed in the game.

They know the rules so well and have been around it for so long that it all just makes sense.
But pull average Joe in off the street or ask a passing space alien what he (she? it?) thinks
about the "system" and they will respond in short order with a common consensus.

Rigged. And the regulators are part of the rigged game.

Mitchman :

I di not take it as an insult my dear friend and especially from such a lofty commentator
as yourself. (BTW, happy anniversary!). My point was that the rules were written at a point
in time when corporate leverage was not the issue that it is today. Remember that in say, 1959,
securitization didn't exist. So taking a lease off the balance sheet didn't seem like such a
big problem. I might also point out that under international accounting rules, where the auditor's
judgment counts a great deal more than it does here in the US, taking a lease obligation off
the balance sheet is much more difficult. Here in the US, under the old FASB 13, it was much
easier to "game" the system. Thereby further proving your point.

Cheers.

Cognitive Dissonance:

Thereby further proving your point.

And well as yours. The more I pull back to bring the big picture into focus, the more my
stomach turns. I fully understand why so many seek drink, drug or other diversions to
kill the pain of the ugly truth. Unfortunately it will only change when people begin to talk
about the painful truths they so desperately try to avoid. Part of our conditioning is to avoid
talking about our conditioning.

Have a good weekend.

Bartanist

As a culture we tend to distance ourselves from people who speak the truth because we
would rather live with a known lie than to invite an uncomfortable conflict and a resolution
that might hurt the liar. Odd, no?

I recall a weeklong exec financial education trip to Wharton back in the mid-90s. One of
the case studies was of Marriott corporation which at the time had superior earnings based on
their degree of leverage. The lesson for us was not that we could have a more profitable company
with greater leverage, but that there is greater and unreasonable risk associated with leverage.

I guess the financial engineers figure that one out. Create companies that were too big and
too connected to the power structure to be allowed to fail and have the saps, errr I mean people,
absorb the risk. Problem solved! Superior earnings and no risk.

Cognitive Dissonance

As a culture we tend to distance ourselves from people who speak the truth because we
would rather live with a known lie than to invite an uncomfortable conflict and a resolution
that might hurt the liar. Odd, no?

Precisely. And also why I selected Cognitive Dissonance as my ID. Because the funny thing
about denial is that while we may be (sub)consciously pushing away the pain and dissonance,
in the background, our subconscious mind is absorbing everything.

So when the time comes for the student to wake, the teacher will already be present in the
form of subconscious knowledge and understanding coming to the surface to be transferred into
the conscious awareness. And this often happens (relatively) quicker if there are subliminal
reminders of our dissonance present.

Hence my ID.

Odd, no? :>)

Bartanist:

I would say, "In a minority, yes" .... Odd? Not to me. I think there will come a time when
people will need people who have not been dead or asleep to help them with the new reality.

AssFire

The mental conflict that occurs when beliefs or assumptions are contradicted by new information.
The unease or tension that the conflict arouses in a person is relieved by one of several defensive
maneuvers: the person rejects, explains away, or avoids the new information, persuades himself
that no conflict really exists, reconciles the differences, or resorts to any other defensive
means of preserving stability or order in his conception of the world and of himself. The concept,
first introduced in the 1950s, has become a major point of discussion and research.

Man, I should have selected my ID with a bit more thought.

NotApplicable:

I'm amazed at how I can talk to anyone about corruption inside of some institution
that they have personal knowledge about, yet they never extrapolate this corruption out to other
institutions. Since they have no personal knowledge of them, they simply trust their
faith, because they cannot stand to know the alternative, that we are all fucked.

Bartanist :

The vast majority of people have been brainwashed when young and impressionable to believe
that should spend their lives striving to be accepted within the power circle... or at least
a well compensated slave (although they do not envision it that way at the time).

Without getting into the extremely esoteric, there is nothing finite about the system that
we are living within. Rules are only rules for those that believe them to be rules and do not
have the power to ignore them. Is this right? IMO, it is neither right or wrong, but only a
means to an end. While the people on this board might be discussing the injustice of something,
somewhere in the world there are people discussing larger problems about how to manage the entire
herd of humans, somewhere else in the world there are people dying from thirst or starvation
and in another part of the world people don't give a damn about materialism and are trying to
figure it all out to connect their 3 halves.

Sure, I believe in honesty, personal freedom and treating others with respect. I believe
in questioning, understanding doing something about it and growing. Do I really need a financial
prison (err system) to help me do that? Probably not. Have I got so much invested in my first
50+ years within the system that it is damn hard to find my way out. You betcha. These prison
bars are made of velvet and excrete vodka on the rocks (with an olive) and a nice juicy steak
cooked to perfection.

John_Coltrane:

So true. As a working research scientist I can tell you that people believe scientists wouldn't
alter results to advance their careers and receive more funding and recognition. But this is
very naive as this happens all the time. Corruption and misuse of funds is rampant especially
at large national laboratories where power is concentrated.

From
Book Review 'The Republican War on Science,' by Chris Mooney - New York Times " This episode makes
me more sympathetic than I might otherwise have been to "The Republican War on Science" by the journalist
Chris Mooney. As the title indicates, Mooney's book is a diatribe, from start to finish. The prose is
often clunky and clichéd, and it suffers from smug, preaching-to-the-choir self-righteousness. But Mooney
deserves a hearing in spite of these flaws, because he addresses a vitally important topic and gets
it basically right.

Mooney charges George Bush and other conservative Republicans with "science abuse," which he defines
as "any attempt to inappropriately undermine, alter or otherwise interfere with the scientific process,
or scientific conclusions, for political or ideological reasons." Science abuse is not an exclusively
right-wing sin, Mooney acknowledges. He condemns Greenpeace for exaggerating the risks of genetically
modified "Frankenfoods," animal-rights groups for dismissing the medical benefits of research on animals
and
John Kerry for overstating the potential of stem cells during his presidential run. " ... "One simple
strategy involves filling federal positions on the basis of ideology rather than genuine expertise."

NEARLY FORTY YEARS AGO, in 1966, two talented young political thinkers published an extraordinary
book, one that reads, in retrospect, as a profound warning to the Republican Party that went tragically
unheeded.

The authors had been roommates at Harvard University, and had participated in the Ripon Society,
an upstart group of Republican liberals. They had worked together on Advance, dubbed "the unofficial
Republican magazine," which slammed the party from within for catering to segregationists, John
Birchers, and other extremists. Following their graduation, both young men moved into the world
of journalism and got the chance to further advance their "progressive" Republican campaign in a
book for the eminent publisher Alfred A. Knopf. In their spirited 1966 polemic The Party That Lost
Its Head, they held nothing back. The book devastatingly critiqued Barry Goldwater's 1964 presidential
candidacy—the modern conservative movement's primal scene—and dismissed the GOP's embrace of rising
star Ronald Reagan as the party's hope to "usurp reality with the fading world of the class-B movie."

Read today, some of the most prophetic passages of The Party That Lost Its Head are those that
denounce Goldwater's conservative backers for their rampant and even paranoid distrust of the nation's
intellectuals. The book labels the Goldwater campaign a "brute assault on the entire intellectual
world" and blames this development on a woefully wrongheaded political tactic: "In recent years
the Republicans as a party have been alienating intellectuals deliberately, as a matter of taste
and strategy."

The authors charge that Goldwater's campaign had no intellectual heft behind it whatsoever, save
the backing of one think tank, the American Enterprise Institute, which they denounce as "an organization
heavily financed by extreme rightists." Continuing in the same vein, they slam William F. Buckley,
Jr., for his attacks on leading universities and describe the advent of right-wing anti-intellectualism
as "crippling" to the Republican Party. The book further deplores conservatives' paranoid distrust
of the "liberal" media and the "Eastern Establishment," and worries that without the backing of
intellectuals and scholars, the GOP will prove unable to develop "workable programs, distinct from
those of the Democrats and responsive to national problems." If the party wants to win back the
"national consensus," the authors argue, it must first win back the nation's intellectuals.

Clearly, The Party That Lost Its Head failed in its goal of prompting a broad Republican realignment.
The GOP went in precisely the opposite direction from the one these young authors prescribed—which
is why the anti-intellectual disposition they so aptly diagnosed in 1966 still persists among many
modern conservatives, helping to fuel the current crisis over the politicization of science and
expertise. In fact, the chief difference between the Goldwater conservatives and those of today
can often seem more cosmetic than real. A massive number of think tanks have now joined the American
Enterprise Institute on the right, but in many cases these outlets still provide only a thin veneer
of intellectual respectability to ideas that mainstream scholarship rejects.

Certainly, the proliferation of think tanks has not had as a corollary that conservatives
now take scientific expertise more seriously. On the contrary, the Right has a strong track record
of deliberately attempting to undermine scientific work that might threaten the economic interests
of private industry. Perhaps more alarmingly still, similar tactics have also been brought to bear
by the Right in the service of a religiously conservative cultural and moral agenda.

The next three chapters demonstrate how cultural conservatives have disregarded, distorted, and
abused science on the issues of evolution, embryonic stem cell research, the relation of abortion
to health risks for women, and sex education. In the process, we will encounter more ideologically
driven think tanks, more questionable science, and more conservative politicians willing to embrace
it.

The story begins, however, with a narrative that cuts to the heart of the modern Right's war
on science. You see, despite the poignant accuracy of their critique, the authors of The Party That
Lost Its Head—Bruce K. Chapman and George Gilder—have since bitten their tongues and morphed from
liberal Republicans into staunch conservatives. In fact, you could say that they have become everything
they once criticized. Once opponents of right-wing anti-intellectualism, they are now prominent
supporters of conservative attacks on the theory of evolution, not just a bedrock of modern science
but one of the greatest intellectual achievements of human history. With this transformation, the
modern Right's war on intellectuals—including scientists and those possessing expertise in other
areas—is truly complete.

The sheer hubris of many in the economics profession never ceases to amaze me. Take for instance
a recent paper by Kartik Athreya of the Federal Reserve Bank of Richmond[1]
entitled "Economics is Hard. Don't let Bloggers Tell You Otherwise". In a move that is eerily reminiscent
of the controversial talking Barbie of the early 1990s who fatefully uttered "Math class is tough"[2],
Athreya's short paper essentially lays out a quite staggering claim :- that economics should be
left to those with a PhD in the subject!

Athreya describes himself as "a worker bee chipping away
with known tools". He goes on to say "writers who have not taken a year of PhD coursework in a decent
economics department…cannot meaningfully advance the discussion on economic policy"[3].
You've got to love the 'decent' in that sentence – it wreaks of intellectual snobbishness of the
highest order.

In fact, Athreya's ire isn't limited to what she sees as uninformed debate, he seems to object
to anyone who attempts to make the policy issues of the day clear even if they have a PhD. He pejoratively
describes both Paul Krugman and Brad DeLong as "Patron saints of the Macroeconomic Policy is Easy"
movement.

He argues that we won't expect particularly informed discussion on the causes, consequences and
treatments for cancer from non-Oncology specialists, so why we would we expect non-specialists to
offer any useful debate on economics.

However, the analogy is false. Modern medicine is based on scientific principles and follows
an evidence based approach. Even then some estimate that the majority of published findings in medical
journals are false[4]!

Economics starts from a far worse place. It isn't a science, and often seems more interested
in twisting the facts to fit a theory rather than the other way around. In fact, as Nassim Taleb
has pointed out, economics is more akin to medieval medicine than its current practice, "Medicine
used to kill more patients than it saved – just as financial economics endangers the system by creating,
not reducing, risk.[5]"

The idea that what we need is more 'worker bees' gaining their PhD's from conducting 'angels
on a pin head' like work based on minor alterations to previous research makes me want to cry. Where
were the warnings from the orthodox economics establishment ahead of the global financial crisis?
Oh, that's right there weren't any.

Indeed many of those who warned of the problems ahead did so because they weren't constrained
by the kind of training that an economics PhD suffers. I did my own training in economics a long
time ago now, it included a fair amount of equation bending but I was incredibly fortunate that
it included generalist topics such as Marxian and post-Keynesian economics, subjects that are oddly
absent from the vast majority of syllabi.

In many ways economics as it exists today is largely a victim of learned helplessness - a phenomenon
was first documented by Martin Seligman in the 1960s. He was working with dogs (dog lovers look
away now) and studying conditioning when he came across something interesting. Seligman was subjecting
pairs of dogs to nondamaging but painful electric shocks. However, in each pair of dogs one animal
could put an end to the shock by simply pressing the side panels of its container with its head.
The other dog was unable to turn off the shock. The electricity was synchronized, starting at the
same point for both dogs, and obviously ending when the dog with the control turned off the power.

This gave the each of the pairs of dogs a very different experience. One experienced the pain
as controllable, while the other did not. The dogs which had no control soon began to cower and
whine (signs of doggy depression) even after the sessions had stopped. The dogs which could control
the shocks showed no signs of this behaviour.

In the second phase of the experiments dogs were placed in box with a low wall separating the
container into two. One side (the side on which the dog started) was electrified. To avoid the pain
the dog simply had to jump the low wall. The dogs which had controlled the shocks in the first round
quickly learned to jump the wall. However, the around two-thirds of the dogs who had no control
in the first round, simply laid down and suffered the pain, they had learned to become helpless.

Modern day economics is much like these poor animals. Many economists have learnt to become helpless.
They would rather lay down and whimper and whine about how unfair the world is, and mutter that
everything would be alright if only people behaved like their models, than seek to look outside
the narrow confines of their obsession with rationality and mathematics to see if others might just
have some useful insight.

The age of the specialist (people who learn more and more about less and less, until they know
absolutely everything about nothing) has proved to have some fundamental flaws. Three cheers for
the generalists!

[1] http://www.scribd.com/doc/33655771/Economics-is-Hard
[2] For more on the weird and wonderful versions of Barbie that have graced the shelves over
the years see http://shine.yahoo.com/channel/parenting/11-bad-barbie-ideas-1312923/?pg=8
[3] Atherya does have the sense to point out "Taken literally, I am almost certainly wrong."
[4] John Ioannidis (2005) Why Most Published Research Findings Are False. PLoS Med 2(8): e124.
doi:10.1371/journal.pmed.0020124
[5] Taleb (2007) The pseudo science hurting markets, Financial Times, 23 October 2007

The Impact
of the Irrelevant on Decision-Making, by Robert H. Frank, Commentary, NY Times: Textbook
economic models assume that people are well informed about all the options they're considering.
It's an absurd claim... Even so, when people confront opportunities to improve their position,
they're generally quick to seize them. ... So most economists are content with a slightly weaker
assumption: that people respond in approximately rational ways to the information available
to them.

But behavioral research now challenges even that more limited claim. For example, even patently
false or irrelevant information often affects choices in significant ways. ...

Lafayette :

PRETTY SILLY

{So most economists are content with a slightly weaker assumption: that people respond
in approximately rational ways to the information available to them. }

No, not even this is adequate. More so, it does not justify the use of Disposable Income,
aka Consumer Demand. (If you don't know why this is important, than maybe you are in the
wrong blog?)

People's decision making can be tweaked around the irrational - and easily so. Impulse
buying is one such tweaking that marketing experts employ with amazing usefulness. When
you arrive at the check-out of a supermarket, why is there an array of sweets available
for your delight. Or the latest "People" journal? Why aren't these products in their proper
section? (Two reasons actually, the first of which is that they are "impulse purchases"
and secondly they could otherwise likely go unnoticed.)

Thus, impulse and not rational propel you to purchase them - and this is just the simplest
of examples.

Conspicuous Consumption has the same motivation that propels one to buy a Beemer
or lunch at the most expensive restaurant in town. One MUST be seen only in the right places.
Are these impulses rational?

Some would say yes, particularly if they lived in Hollywood, where they are conforming
to a lifestyle that is all appearance and little substance. But what is their economic utility
as consumption? That is considerably more difficult to substantiate.

(Far more so than, say, a Public Option for decent national Health Care insurance.)

Thus arises the pitfall of economic rationalization as regards our motivations that propel
Demand. It ennobles mankind to assume that individual decisions were based uniquely upon
logic and rationale. But, alas, those are not the only attributes underlying human decision
making. There are others far more base that also propel us to demonstrate some pretty silly
consumer behaviour.

While I can agree with the main thrust of the argument; to label as science the on-and-off-again
twenty year Anglo-Saxon campaign to kill the Euro is quixotic at best even if recently this campaign
has been leaving some dark blue marks across the eurozone's face. One area where I still hold suspicions
though are the Dutch and German banks who bought all that subprime crap from Wall Street. Were they
really just stupid euro-country bumpkins or was it more than that? The jury is still out on that one.

A disconcerting tendency that may also impair adaptability (and this seems to be particularly
pronounced in the US) is the tendency to engage in black and white thinking. If (in someone's mind)
the only alternative to one view is its polar opposite, that makes it hard to adjust one's perspective.

Ars technica presents a more specific example of this phenomenon, of how people defend their
mental models in the face of confounding evidence. A study from the Journal of Applied Social Psychology
looked into some of the mechanisms that individuals use to reject scientific information that is
at odds with their views. Admittedly, this is a small scale study, so one has to be cautious in
generalizing from it. But it does seem consistent with some of the strategies I routinely seem in
comments.

It's hardly a secret that large segments of the population choose not to accept scientific
data because it conflicts with their predefined beliefs: economic, political, religious, or
otherwise. But many studies have indicated that these same people aren't happy with viewing
themselves as anti-science, which can create a state of cognitive dissonance. That has left
psychologists pondering the methods that these people use to rationalize the conflict.

A study published in the Journal of Applied Social Psychology takes a look at one of these
methods, which the authors term "scientific impotence"—the decision that science can't actually
address the issue at hand properly. It finds evidence that not only supports the scientific
impotence model, but suggests that it could be contagious. Once a subject has decided that a
given topic is off limits to science, they tend to start applying the same logic to other issues…

Munro polled a set of college students about their feelings about homosexuality, and then
exposed them to a series of generic scientific abstracts that presented evidence that it was
or wasn't a mental illness (a control group read the same abstracts with nonsense terms in place
of sexual identities). By chance, these either challenged or confirmed the students' preconceptions.
The subjects were then given the chance to state whether they accepted the information in the
abstracts and, if not, why not.

Regardless of whether the information presented confirmed or contradicted the students' existing
beliefs, all of them came away from the reading with their beliefs strengthened. As expected,
a number of the subjects that had their beliefs challenged chose to indicate that the subject
was beyond the ability of science to properly examine. This group then showed a weak tendency
to extend that same logic to other areas, like scientific data on astrology and herbal remedies.

A second group went through the same initial abstract-reading process, but were then given
an issue to research (the effectiveness of the death penalty as a deterrent to violent crime),
and offered various sources of information on the issue. The group that chose to discount scientific
information on the human behavior issue were more likely than their peers to evaluate nonscientific
material when it came to making a decision about the death penalty.

Yves here. I'm not certain whether the authors are being tongue in cheek in this section:

….it might explain why doubts about mainstream science seem to travel in packs. For example,
the Discovery Institute, famed for hosting a petition that questions our understanding of evolution,
has recently taken up climate change as an additional issue (they don't believe the scientific
community on that topic, either). The Oregon Institute of Science and Medicine is best known
for hosting a petition that questions the scientific consensus on climate change, but the people
who run it also promote creationism and question the link between HIV and AIDS.

Yves again. It is worth considering whether some of this "science can't evaluate this area" meme
exists is at least in part because it is being marketed. Perhaps I lead a cloistered life, but when
I was younger, say 20 years ago, I can't recall encountering this line of argument.

The book Agnotology:
The Making and Unmaking of Ignorance gives a detailed account of how the tobacco industry
first tried to keep research about smoking-related cancers out of the public eye, and when that
started to fail, to attack the science ("Doubt is our product"). One of its late-stage techniques
was to promote the idea that the topic wasn't settled when a tally of the then-available research
would say otherwise. Given that knowledge is often the product of political and cultural battles,
promoting higher-order anti-science ideas ("science has very considerable limits, there are a lot
of areas outside its ken") gives those who would seek to reshape mass opinion more freedom of action.

Selected Comments

attempter:

For instance, early in the days of euro wobbliness, some readers in Europe would go a
bit off the deep end at the suggestion that the Eurozone has serious structural weaknesses and
that the austerity regimes required of the deficit countries looked unattainable (and even if
they could be met, success would be a Pyrrhic victory). It wasn't so much that these readers
found weaknesses or shortcomings in the post; it's that its conclusion was clearly deeply offensive
to them.

Yes, it's true that many people find the proposition morally deeply repulsive that the non-rich,
already beleaguered by job destruction and the shredding of the safety net, should be crushed
by "austerity" in order that the banks can be bailed out and the rich can continue evading
taxes, such that even if there were reason to believe this course of action would bring
broad prosperity 20 years from now they'd still reject the idea.

Of course neoliberalism has been dominant for c. 40 years now, and that broad "prosperity"
remains just as much a vapor on the horizon today as it ever was, except to the extent that
a debt ponzi scheme could temporarily prop up a version of it.

The fact is that we know by now, empirically, that neoliberalism's version of the "sacrifice
today so we'll have utopia tomorrow" lie is the exact same Big Lie as when any other ideology
or regime told it. We know for a fact that prosperity will never "trickle down", and that it
was never intended to trickle down.

So by now anyone who rejects the predatory prescriptions of the kleptocracy is acting
based on the overwhelming evidence, therefore "scientifically" for purposes of this discussion,
while anyone who still retains faith in trickle down is truly mired in a cult fundamentalist
mindset.

So much for the proposition that broad-based prosperity can be attained by continuing down
the neoliberal path. As for whether exponential debt can be forever zombified under any
circumstances, let alone whether reality-based growth could ever again be attained, it's the
physics of energy which says No, while the cornucopianism of debt and energy is always reduced
in the end to the religious proposition, "technology will save us; technology will always find
a way".

So there too, whatever emotions may go into the skeptical mindset, science is not on the
side of the pollyannas.

Technology did not in fact find much of a way (by modern standards) prior to the fossil fuel
age, and a scientifically sober mindset would start with the theory that it will not be able
to sustain anything like this level of energy consumption and massive, top-heavy, high-impact
centralization post-Peak Oil.

And then there's every other resource limitation. There's the stark unreality of the very
concept of exponential growth. Really, it's hard to imagine a less scientific mindset than that
which believes there's a way to "grow" out of this already absurdly unsustainable predicament.

JimS :

I think there is a difference between being anti-science with a small "s" and being anti-Science
with a capital "S". Few would argue that 2+2=4, but theoretical physicists seem to be evenly
divided on string theory. Paradoxically the bigger the picture is, the more binary the beliefs.
This is not due to disagreement with the data points but with the underlying principles. Consider
the following familiar exchange:

Student: "I've run the regression analysis, and here is my model."

Professor: "Very good, but are you sure you've identified all the variables that might be
significant?"

People don't question individual mechanisms; it's whether or not the right mechanisms are
being accounted for. In that sense the datum is irrelevant.

What do skeptics and good scientists have in common? They both question if all the significant
variables have been found.

As for denial, well, people are fundamentally irrational–that is to say we are only rational
to a certain point–but on top of that we're less educated. A friend of mine observes that he
learned debate in school, but not logic from which to debate. It seems to me that education
is more formulaic these days, sacrificing critical thinking (even though all text books have
those grey-background "critical thinking" boxes).

For the record, as a Christian I do not find God and evolution to be mutually exclusive;
nor God and quantum physics for that matter. Can God bake a potato so hot that He can't eat
it? Is Schrödinger's cat dead or alive?

Kevin de Bruxelles:

While I can agree with the main thrust of the argument; to label as science the on-and-off-again
twenty year Anglo-Saxon campaign to kill the Euro is quixotic at best even if recently this
campaign has been leaving some dark blue marks across the eurozone's face. The fact
is economics is nothing more than religion. And sure, like most religions it certainly contains
some nuggets of wisdom. But to pretend that economics and the recent attacks on the euro has
anything approaching objectivity is quickly proven wrong by the fact that similar data points
in the US or UK are handled differently. For example where are the outcries of the break-up
of the dollarzone since California and other US states are imposing austerity programs? Should
the mid-western states that have growing ghost towns break off a hillbilly dollar? When the
euro goes up it is a sign of disaster, when the euro goes down it is also a sign of disaster.
When European trade increases it is called "beggar thy neighbour"; but when the eurozone by
its very nature does not allow "beggar thy neighbour" between its members it is called an suboptimal
currency area.

According to Robert Nozick, one cannot have knowledge of something if one does not accept
that the opposite could also be true. For the eurozone critics it would go like this:

1.Statement Y: The eurozone is doomed to failure

2.Person X believes Y (the eurozone is doomed to failure)

3.If Y were false (the eurozone were not doomed to failure), Person X would accept the eurozone
is viable if it were so.

4.If statement Y is true, Person Y would believe it.

Nozick uses the example of a father who "knows" his son is innocent of a crime. After the
trial the father cannot really say he "knew" his son was innocent since if the kid had been
found guilty he would still have believed him innocent. The same is true of some eurozone critics;
they have "known" the eurozone would fail and they will keep on knowing it until the day it
eventually happens, one way or the other. They can never accept that the eurozone could survive
because this would blunt the force of their attacks. But this doesn't mean that their critiques
are false. For example some critics quite correctly point out that the European financial architecture
is flawed. But the second anyone moves towards correcting any flaws, these critics will immediately
scream about eurozone fascism. The point is that the many of the attacks are only meant to help
bring the eurozone down. Other onslaughts against the euro are by the mouthpieces of Anglo-Saxon
elites who are more concerned that European style social democracy never again raise its head
in the US. They were scared by the recent health care debate where America's unjust and inefficient
health care system was openly compared to the more advanced and fair European systems. Anyone
who knows how well the rich in America are cared for can understand why they don't want to share
any of their advantages with any other social class. The next time any American compares their
social benefits to Europe they will be slapped down by the fact that the Euro has obviously
collapsed all the way back to the midpoint of its historic value range.

No the battle of the Euro cannot be studied by science any more than the Eastern Front in
WW2 could be. The way it has to be studied is as a power struggle.

And as a media campaign the only comparison in recent memory was the wall of noise heard
before the invasion of Iraq. The only remaining question is which Anglo-Saxon economist will
get to play Colin Powell and make the requisite speech before the UN giving Europe an ultimatum
to dismantle the eurozone? And yes some euro-symps lash out and get angry by these insistent
attacks on the euro. And this is understandable since arguably the eurozone's recent troubles
started when European banks started barebacking loads of infected American subprime paper from
their Wall Street beaus. In more vulgar terms the US has given Europe the financial equivalent
of a sexually transmitted disease and now as the eurozone's sores and scabs become more apparent
the Anglo-Saxon press is shouting with glee about what a skanky debt-ho Europe is! And as a
result of the growing Anglo-Saxon infection Europe's financial immune system is weakening and
has to undergo some pretty drastic procedures, the shaming and ridicule has risen to a fever
pitch.

But while outrage is understandable, people in Europe really need to put their energy into
counterattacks and building defences while always understanding that the most natural thing
in the world is for the powerful Anglo-Saxons to attack the less powerful Europeans. Thucydides
described it well in the Melian Dialogue. The more powerful Athenians decided they were going
to invade the island of Melos. They sent a delegation there to convince the local leaders to
surrender. One of the arguments they used was:

For ourselves, we shall not trouble you with specious pretences- either of how we have
a right to our empire because we overthrew the Mede, or are now attacking you because of wrong
that you have done us- and make a long speech which would not be believed; and in return we
hope that you, instead of thinking to influence us by saying that you did not join the Lacedaemonians,
although their colonists, or that you have done us no wrong, will aim at what is feasible, holding
in view the real sentiments of us both; since you know as well as we do that right, as the
world goes, is only in question between equals in power, while the strong do what they can and
the weak suffer what they must.

In the end the Melians declined to surrender and they were subsequently overrun by the Athenians,
who killed all the men, and raped some and enslaved all of the women and children.

So Europe has to decide whether it will stand up and fight for the Euro or weakly submit
to the Anglo-Saxon attacks. European energy should not go into being outraged by the attacks
on the eurozone since this reeks of naivety. Better that the hard decisions be taken. Since
WW2 Europe has played the undisciplined child to the US' parental role. Since Europe is still
more or less living under the US' roof is it wrong for the US to call the shots like abandoning
the Euro? Is Europe ready to finally grow up, become fully independent move out and the US's
comfortable and protective house? It will be questions like this, not science, that will decide
if the eurozone survives or not.

For example what would be the best European counterattack to the Anglo-Saxon onslaught? Exporting
deflation? Perhaps. Which of the main global economic blocks is balanced and stable enough to
come through a good bout of deflation? The US – never. China – hardly. Japan – perhaps. Europe
– probably.

Thomas Friedman calls for scientists to go on the offensive against climate change deniers and
skeptics:

Global Weirding
Is Here, by Thomas Friedman, Commentary, NYTimes: Of the festivals of nonsense that periodically
overtake American politics, surely the silliest is the argument that because Washington is having
a particularly snowy winter it proves that climate change is a hoax and, therefore, we need
not bother with all this girly-man stuff like renewable energy, solar panels and carbon taxes.
Just drill, baby, drill.

When you see lawmakers like Senator Jim DeMint of South Carolina tweeting that "it is going
to keep snowing until Al Gore cries 'uncle,' " or news that the grandchildren of Senator James
Inhofe of Oklahoma are building an igloo next to the Capitol with a big sign that says "Al Gore's
New Home," you really wonder if we can have a serious discussion about the climate-energy issue
anymore.

The climate-science community is not blameless. It knew it was up against formidable forces...
Therefore, climate experts can't leave themselves vulnerable by citing non-peer-reviewed research
or failing to respond to legitimate questions, some of which happened with both the Climatic
Research Unit at the University of East Anglia and the United Nations Intergovernmental Panel
on Climate Change.

Selected comments

bakho:

Until the media starts shining a light on the wealthy special interests behind the disinformation
campaign, the public will continue to be confused. It is always more difficult for people to
relearn than it is to teach for the first time. The huge amount of money spent on disinformation
is a problem that climate change experts cannot overcome on their own.

anne:

While the politically motivated bashers of scientists in general and climate scientists especially
have been continually at work distorting the findings of scientists and undermining a sense
of confidence in the way we approach the findings of scientists, there has been a remarkable
political reticience to teach about the nature of what scientists have been finding and to openly
support scientists.

President Obama has in no way meaningfully supported the finding of climatologists, and the
result will be meaningful climate change legislation which could already have been shaped and
passed will be almost impossible to shape and pass this year.

Peter:

Thomas "we have six months to act in Iraq" (in continuous time!) Friedman thinks the American
public can comprehend a scientific argument, e.g., one that depends on the correct understanding
of statistical significance. Now that's a LOL.

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni
and staff economists, so thoroughly dominates the field of economics that real criticism of the
central bank has become a career liability for members of the profession, an investigation
by the Huffington Post has found.

This dominance helps explain how, even after the Fed failed
to foresee the greatest economic collapse since the Great Depression, the central bank has largely
escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.

"The Fed has a lock on the economics world," says Joshua Rosner, a Wall Street analyst who correctly
called the meltdown. "There is no room for other views, which I guess is why economists got it so
wrong."

One critical way the Fed exerts control on academic economists is through its relationships with
the field's gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue
for rising economists, more than half of the editorial board members are currently on the Fed payroll
-- and the rest have been in the past.

The Fed failed to see the housing bubble as it happened, insisting that the rise in housing prices
was normal. In 2004, after "flipping" had become a term cops and janitors were using to describe
the way to get rich in real estate, then-Federal Reserve Chairman Alan Greenspan said that "a national
severe price distortion [is] most unlikely." A year later, current Chairman Ben Bernanke said that
the boom "largely reflect strong economic fundamentals."

The Fed also failed to sufficiently regulate major financial institutions, with Greenspan --
and the dominant economists -- believing that the banks would regulate themselves in their own self-interest.

Despite all this, Bernanke has been nominated for a second term by President Obama.

In the field of economics, the chairman remains a much-heralded figure, lauded for reaction to
a crisis generated, in the first place, by the Fed itself. Congress is even considering legislation
to greatly expand the powers of the Fed to systemically regulate the financial industry.

Paul Krugman, in
Sunday's
New York Times magazine, did his own autopsy of economics, asking "How Did Economists Get It
So Wrong?" Krugman concludes that "[e]conomics, as a field, got in trouble because economists were
seduced by the vision of a perfect, frictionless market system."

So who seduced them?

The Fed did it.

Three Decades of Domination

The Fed has been dominating the profession for about three decades. "For the economics profession
that came out of the [second world] war, the Federal Reserve was not a very important place as far
as they were concerned, and their views on monetary policy were not framed by a working relationship
with the Federal Reserve. So I would date it to maybe the mid-1970s," says University of Texas economics
professor -- and Fed critic -- James Galbraith. "The generation that I grew up under, which included
both Milton Friedman on the right and Jim Tobin on the left, were independent of the Fed. They sent
students to the Fed and they influenced the Fed, but there wasn't a culture of consulting, and it
wasn't the same vast network of professional economists working there."

But by 1993, when former Fed Chairman Greenspan provided the House banking committee with a breakdown
of the number of economists on contract or employed by the Fed, he reported that 189 worked for
the board itself and another 171 for the various regional banks. Adding in statisticians, support
staff and "officers" -- who are generally also economists -- the total number came to 730. And then
there were the contracts. Over a three-year period ending in October 1994, the Fed awarded 305 contracts
to 209 professors worth a total of $3 million.

Just how dominant is the Fed today?

The Federal Reserve's Board of Governors employs 220 PhD economists and a host of researchers
and support staff, according to a Fed spokeswoman. The 12 regional banks employ scores more. (HuffPost
placed calls to them but was unable to get exact numbers.) The Fed also doles out millions of dollars
in contracts to economists for consulting assignments, papers, presentations, workshops, and that
plum gig known as a "visiting scholarship." A Fed spokeswoman says that exact figures for the number
of economists contracted with weren't available. But, she says, the Federal Reserve spent $389.2
million in 2008 on "monetary and economic policy," money spent on analysis, research, data gathering,
and studies on market structure; $433 million is budgeted for 2009.

That's a lot of money for a relatively small number of economists. According to the American
Economic Association, a total of only 487 economists list "monetary policy, central banking, and
the supply of money and credit," as either their primary or secondary specialty; 310 list "money
and interest rates"; and 244 list "macroeconomic policy formation [and] aspects of public finance
and general policy." The National Association of Business Economists tells HuffPost that 611 of
its roughly 2,400 members are part of their "Financial Roundtable," the closest way they can approximate
a focus on monetary policy and central banking.

Auerbach found that in 1992, roughly 968 members of the AEA designated "domestic monetary and
financial theory and institutions" as their primary field, and 717 designated it as their secondary
field. Combining his numbers with the current ones from the AEA and NABE, it's fair to conclude
that there are something like 1,000 to 1,500 monetary economists working across the country. Add
up the 220 economist jobs at the Board of Governors along with regional bank hires and contracted
economists, and the Fed employs or contracts with easily 500 economists at any given time. Add in
those who have previously worked for the Fed -- or who hope to one day soon -- and you've accounted
for a very significant majority of the field.

Auerbach concludes that the "problems associated with the Fed's employing or contracting with
large numbers of economists" arise "when these economists testify as witnesses at legislative hearings
or as experts at judicial proceedings, and when they publish their research and views on Fed policies,
including in Fed publications."

Gatekeepers On The Payroll

The Fed keeps many of the influential editors of prominent acade>The pharmaceutical industry
has similarly worked to control key medical journals, but that involves several companies. In the
field of economics, it's just the Fed.

Being on the Fed payroll isn't just about the money, either. A relationship with the Fed carries
prestige; invitations to Fed conferences and offers of visiting scholarships with the bank signal
a rising star or an economist who has arrived.

Affiliations with the Fed have become the oxygen of academic life for monetary economists. "It's
very important, if you are tenure track and don't have tenure, to show that you are valued by the
Federal Reserve," says Jane D'Arista, a Fed critic and an economist with the Political Economy Research
Institute at the University of Massachusetts, Amherst.

Robert King, editor in chief of the Journal of Monetary Economics and a visiting scholar at the
Richmond Federal Reserve Bank, dismisses the notion that his journal was influenced by its Fed connections.
"I think that the suggestion is a silly one, based on my own experience at least," he wrote in an
e-mail. (His full response is at the bottom.)

Galbraith, a Fed critic, has seen the Fed's influence on academia first hand. He and co-authors
Olivier Giovannoni and Ann Russo found that in the year before a presidential election, there is
a significantly tighter monetary policy coming from the Fed if a Democrat is in office and a significantly
looser policy if a Republican is in office. The effects are both statistically significant, allowing
for controls, and economically important.

They submitted a paper with their findings to the Review of Economics and Statistics in 2008,
but the paper was rejected. "The editor assigned to it turned out to be a fellow at the Fed and
that was after I requested that it not be assigned to someone affiliated with the Fed," Galbraith
says.

Publishing in top journals is, like in any discipline, the key to getting tenure. Indeed, pursuing
tenure ironically requires a kind of fealty to the dominant economic ideology that is the precise
opposite of the purpose of tenure, which is to protect academics who present oppositional perspectives.

And while most academic disciplines and top-tier journals are controlled by some defining paradigm,
in an academic field like poetry, that situation can do no harm other than to, perhaps, a forest
of trees. Economics, unfortunately, collides with reality -- as it did with the Fed's incorrect
reading of the housing bubble and failure to regulate financial institutions. Neither was a matter
of incompetence, but both resulted from the Fed's unchallenged assumptions about the way the market
worked.

Even the late Milton Friedman, whose monetary economic theories heavily influenced Greenspan,
was concerned about the stifled nature of the debate. Friedman, in a 1993 letter to Auerbach that
the author quotes in his book, argued that the Fed practice was harming objectivity: "I cannot disagree
with you that having something like 500 economists is extremely unhealthy. As you say, it is not
conducive to independent, objective research. You and I know there has been censorship of the material
published. Equally important, the location of the economists in the Federal Reserve has had a significant
influence on the kind of research they do, biasing that research toward noncontroversial technical
papers on method as opposed to substantive papers on policy and results," Friedman wrote.

Greenspan told Congress in October 2008 that he was in a state of "shocked disbelief" and that
the "whole intellectual edifice" had "collapsed." House Committee on Oversight and Government Reform
Chairman Henry Waxman (D-Calif.) followed up: "In other words, you found that your view of the world,
your ideology, was not right, it was not working."

"Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked,
because I have been going for 40 years or more with very considerable evidence that it was working
exceptionally well."

But, if the intellectual edifice has collapsed, the intellectual infrastructure remains in place.
The same economists who provided Greenspan his "very considerable evidence" are still running the
journals and still analyzing the world using the same models that were incapable of seeing the credit
boom and the coming collapse.

Rosner, the Wall Street analyst who foresaw the crash, says that the Fed's ideological dominance
of the journals hampered his attempt to warn his colleagues about what was to come. Rosner wrote
a strikingly
prescient paper in 2001 arguing that relaxed lending standards and other factors would lead
to a boom in housing prices over the next several years, but that the growth would be highly susceptible
to an economic disruption because it was fundamentally unsound.

He expanded on those ideas over the next few years, connecting the dots and concluding that the
coming housing collapse would wreak havoc on the collateralized debt obligation (CDO) and mortgage
backed securities (MBS) markets, which would have a ripple effect on the rest of the economy. That,
of course, is exactly what happened and it took the Fed and the economics field completely by surprise.

"What you're doing is, actually, in order to get published, having to whittle down or narrow
what might otherwise be oppositional or expansionary views," says Rosner. "The only way you can
actually get in a journal is by subscribing to the views of one of the journals."

When Rosner was casting his paper on CDOs and MBSs about, he knew he needed an academic economist
to co-author the paper for a journal to consider it. Seven economists turned him down.

"You don't believe that markets are efficient?" he says they asked, telling him the paper was
"outside the bounds" of what could be published. "I would say 'Markets are efficient when there's
equal access to information, but that doesn't exist,'" he recalls.

The CDO and MBS markets froze because, as the housing market crashed, buyers didn't trust that
they had reliable information about them -- precisely the case Rosner had been making.

Together, the two papers offer a better analysis of what led to the crash than the economic journals
have managed to put together - and they were published by a non-PhD before the crisis.

Not As Simple As A Pay-Off

Economist Rob Johnson
serves on the UN Commission of Experts on Finance and International Monetary Reform and was a top
economist on the Senate banking committee under both a Democratic and Republican chairman. He says
that the consulting gigs shouldn't be looked at "like it's a payoff, like money. I think it's more
being one of, part of, a club -- being respected, invited to the conferences, have a hearing with
the chairman, having all the prestige dimensions, as much as a paycheck."

The Fed's hiring of so many economists can be looked at in several ways, Johnson says, because
the institution does, of course, need talented analysts. "You can look at it from a telescope, either
direction. One, you can say well they're reaching out, they've got a big budget and what they're
doing, I'd say, is canvassing as broad a range of talent," he says. "You might call that the 'healthy
hypothesis.'"

The other hypothesis, he says, "is that they're essentially using taxpayer money to wrap their
arms around everybody that's a critic and therefore muffle or silence the debate. And I would say
that probably both dimensions are operative, in reality."

To get a mainstream take, HuffPost called monetary economists at random from the list as members
of the AEA. "I think there is a pretty good number of professors of economics who want a very limited
use of monetary policy and I don't think that that necessarily has a negative impact on their careers,"
said Ahmed Ehsan, reached at the economics department at James Madison University. "It's quite possible
that if they have some new ideas, that might be attractive to the Federal Reserve."

Ehsan, reflecting on his own career and those of his students, allowed that there is, in fact,
something to what the Fed critics are saying. "I don't think [the Fed has too much influence], but
then my area is monetary economics and I know my own professors, who were really well known when
I was at Michigan State, my adviser, he ended up at the St. Louis Fed," he recalls. "He did lots
of work. He was a product of the time...so there is some evidence, but it's not an overwhelming
thing."

There's definitely prestige in spending a few years at the Fed that can give a boost to an academic
career, he added. "It's one of the better career moves for lots of undergraduate students. It's
very competitive."

Press officers for the Federal Reserve's board of governors provided some background information
for this article, but declined to make anyone available to comment on its substance.

The Fed's Intolerance For Dissent

When dissent has arisen, the Fed has dealt with it like any other institution that cherishes
homogeneity.

Take the case of Alan Blinder. Though he's squarely within the mainstream and considered one
of the great economic minds of his generation, he lasted a mere year and a half as vice chairman
of the Fed, leaving in January 1996.

Rob Johnson, who watched the Blinder ordeal, says Blinder made the mistake of behaving as if
the Fed was a place where competing ideas and assumptions were debated. "Sociologically, what was
happening was the Fed staff was really afraid of Blinder. At some level, as an applied empirical
economist, Alan Blinder is really brilliant," says Johnson.

In closed-door meetings, Blinder did what so few do: challenged assumptions. "The Fed staff would
come out and their ritual is: Greenspan has kind of told them what to conclude and they produce
studies in which they conclude this. And Blinder treated it more like an open academic debate when
he first got there and he'd come out and say, 'Well, that's not true. If you change this assumption
and change this assumption and use this kind of assumption you get a completely different result.'
And it just created a stir inside--it was sort of like the whole pipeline of Greenspan-arriving-at-decisions
was
disrupted."

It didn't sit well with Greenspan or his staff. "A lot of senior staff...were pissed off about
Blinder -- how should we say? -- not playing by the customs that they were accustomed to," Johnson
says.

And celebrity is no shield against Fed excommunication. Paul Krugman, in fact, has gotten rough
treatment. "I've been blackballed from the Fed summer conference at Jackson Hole, which I used to
be a regular at, ever since I criticized him," Krugman said of Greenspan in a 2007 interview with
Pacifica Radio's Democracy Now! "Nobody really wants to cross him."

An invitation to the annual conference, or some other blessing from the Fed, is a signal to the
economic profession that you're a certified member of the club. Even Krugman seems a bit burned
by the slight. "And two years ago," he said in 2007, "the conference was devoted to a field, new
economic geography, that I invented, and I wasn't invited."

Three years after the conference, Krugman won a Nobel Prize in 2008 for his work in economic
geography.

One Journal, In Detail

The Huffington Post reviewed the mastheads of the American Journal of Economics, the Journal
of Economic Perspectives, Journal of Economic Literature, the American Economic Journal: Applied
Economics, American Economic Journal: Economic Policy, the Journal of Political Economy and the
Journal of Monetary Economics.

HuffPost interns Googled around looking for resumes and otherwise searched for Fed connections
for the 190 people on those mastheads. Of the 84 that were affiliated with the Federal Reserve at
one point in their careers, 21 were on the Fed payroll even as they served as gatekeepers at prominent
journals.

At the Journal of Monetary Economics, every single member of the editorial board is or has been
affiliated with the Fed and 14 of the 26 board members are presently on the Fed payroll.

After the top editor, King, comes senior associate editor Marianne Baxter, who has written papers
for the Chicago and Minneapolis banks and was a visiting scholar at the Minneapolis bank in '84,
'85, at the Richmond bank in '97, and at the board itself in '87. She was an advisor to the president
of the New York bank from '02-'05. Tim Geithner, now the Treasury Secretary, became president of
the New York bank in '03.

The senior associate editors: Janice C Eberly was a Fed visiting-scholar at Philadelphia ('94),
Minneapolis ('97) and the board ('97). Martin Eichenbaum has written several papers for the Fed
and is a consultant to the Chicago and Atlanta banks. Sergio Rebelo has written for and was previously
a consultant to the board. Stephen Williamson has written for the Cleveland, Minneapolis and Richmond
banks, he worked in the Minneapolis bank's research department from '85-'87, he's on the editorial
board of the Federal Reserve Bank of St. Louis Review, is the co-organizer of the '09 St. Louis
Federal Reserve Bank annual economic policy conference and the co-organizer of the same bank's '08
conference on Money, Credit, and Policy, and has been a visiting scholar at the Richmond bank ever
since '98.

And then there are the associate editors. Klaus Adam is a visiting scholar at the San Francisco
bank. Yongsung Chang is a research associate at the Cleveland bank and has been working with the
Fed in one position or another since '01. Mario Crucini was a visiting scholar at the Federal Reserve
Bank of New York in '08 and has been a senior fellow at the Dallas bank since that year. Huberto
Ennis is a senior economist at the Federal Reserve Bank of Richmond, a position he's held since
'00. Jonathan Heathcote is a senior economist at the Minneapolis bank and has been a visiting scholar
three times dating back to '01.

Ricardo Lagos is a visiting scholar at the New York bank, a former senior economist for the Minneapolis
bank and a visiting scholar at that bank and Cleveland's. In fact, he was a visiting scholar at
both the Cleveland and New York banks in '07 and '08. Edward Nelson was the assistant vice president
of the St Louis bank from '03-'09.

Esteban Rossi-Hansberg was a visiting scholar at the Philadelphia bank from '05-'09 and similarly
served at the Richmond, Minneapolis and New York banks.

Pierre-Daniel Sarte is a senior economist at the Richmond bank, a position he's held since '96.
Frank Schorfheide has been a visiting scholar at the Philadelphia bank since '03 and at the New
York bank since '07. He's done four such stints at the Atlanta bank and scholared for the board
in '03. Alexander Wolman has been a senior economist at the Richmond bank since 1989.

Here is the complete response from King, the journal's editor in chief: "I think that the suggestion
is a silly one, based on my own experience at least. In a 1988 article for AEI later republished
in the Federal Reserve Bank of Richmond Review, Marvin Goodfriend (then at FRB Richmond and now
at Carnegie Mellon) and I argued that it was very important for the Fed to separate monetary policy
decisions (setting of interest rates) and banking policy decisions (loans to banks, via the discount
window and otherwise). We argued further that there was little positive case for the Fed to be involved
in the latter: broadbased liquidity could always be provided by the former. We also argued that
moral hazard was a cost of banking intervention.

"Ben Bernanke understands this distinction well: he and other members of the FOMC have read my
perspective and sometimes use exactly this distinction between monetary and banking policies. In
difficult times, Bernanke and his fellow FOMC members have chosen to involve the Fed in major financial
market interventions, well beyond the traditional banking area, a position that attracts plenty
of criticism and support. JME and other economics major journals would certainly publish exciting
articles that fell between these two distinct perspectives: no intervention and extensive intervention.
An upcoming Carnegie-Rochester conference, with its proceeding published in JME, will host a debate
on 'The Future of Central Banking'.

"You may use only the entire quotation above or no quotation at all."

Auerbach, shown King's e-mail, says it's just this simple: "If you're on the Fed payroll there's
a conflict of interest."

I have three general impressions. First the sourcing is very odd. There are fairly few academic
economists quoted and two of them firmly contest Ryan Grim's thesis.

Second it is assumed that the Federal Reserve System is a centrally controlled disciplined organization.
Grim explicitly includes regional Federal Reserve Banks. Thus he assumes that the Federal Reserve
Bank of Minneapolis is identical to the Federal Reserve Bank of Boston. This is a bold assumption.
Finally, he is convinced that the economists who might comment on the FED are "monetary economists."
I have met macroeconomists and economists who work on money banking and credit, but I don't recall
ever meeting a monetary economist.

I have no idea how much influence the Fed has on the debate in the profession (really) and certainly
agree that the economics profession is dangerously in bred and that it is much much much better
for an economist to be conventionally wrong than unconventionally right (but it's gotten better
in the past 20 years).

More detailed comments after the jump.

OK editorial standards. Grims list of the journals that he considers important follows

The Huffington Post reviewed the mastheads of the American Journal of Economics, the Journal
of Economic Perspectives, Journal of Economic Literature, the American Economic Journal: Applied
Economics, American Economic Journal: Economic Policy, the Journal of Political Economy and the
Journal of Monetary Economics.

The list does not appear to include the American Economic Review which is a bit more important
than the American Journal of Economics. It also doesn't include the Quarterly Journal, Econometrica,
The Review of Economic Studies, The Journal of Economic Theory or, well, any of the really top journals
except for the Journal of Political Economy.

The Journal of Economic Literature is mainly an index of articles. It contains review articles
and book reviews (partly I think so that it can be shipped with the special rate for journals).
The journal of economic perspectives doesn't really publish research exactly -- articles are meant
to be easily understood so its role is, in very large part, divulgative.

Grim attempts to explain why economists didn't warn of the financial crisis before it hit, in
part, by having interns google members of the boards of the American Economic Journal: Applied Economics,
American Economic Journal: Economic Policy

I quote from the Wikipedia

American Economic Journal is a group of four peer-reviewed academic journals published by the
American Economic Association. The names of the individual journals consist of the prefix American
Economic Journal with a descriptor of the field attached. The four field journals which started
in 2009 are Applied Economics, Economic Policy, Macroeconomics, and Microeconomics.

it is a bit harsh to blame the editors of journals which started publishing in 2009 for the failure
to warn of the events of September 2008. I think normal courtesy would compel someone to wikipedia
a journal title before having interns google its board of editors.

On lumping regional banks in
with the board of governors, Grim argues that Bernanke controls the JME partly by noting that many
editors of the JME are affiliated with the Federal Reserve Bank of Minneapolis. This is not a joke.

Now as to the universe of critics the Fed might want to buy off. Grim assumes that it consists
of "monetary economists" who are distinct from macroeconomists of finance economists. I don't think
there is such a group of people (name one).
Yet oddly, he considers many people who are not monetary economists valid critics of the Fed. He
quotes Joshua Rosner, a Wall Street analyst, James Galbraith (who sure knows what he's talking about
but probably doesn't "list 'monetary policy, central banking, and the supply of money and credit,'
as either their primary or secondary specialty," (I will write "not monetary" below) Robert Auerbach,
a former investigator with the House banking committee, Jane D'Arista, a Fed critic and an economist
with the Political Economy Research Institute at the University of Massachusetts (not monetary)
Robert King (who contests his thesis and is I'd guess not monetary), a letter from Milton Friedman
(OK he's got one monetary economist who criticizes the Fed), Economist Rob Johnson (OK maybe two),
Ahmed Ehsan a self described monetary economist who disagrees with the thesis, and Paul Krugman
(not monetary).

The thesis is that the Fed (including regional banks who take orders from the chairman evidently)
controls most people who have standing to criticize the Fed. Journalistic integrity requires checking
if the critics of the Fed whose standing Grim considers adequate are on his list of people who have
the standing to criticize the Fed. I'd guess that at most one does (Friedman is, sadly, no longer
a member of the AEA).

The economics profession is a very large very slow moving target, but it is possible to miss.

I think Waldmann is widely off the mark with his simplistic critique of the article.
Nitpicking on shortcomings he misses the whole picture which is the fact that there are perverse
"academic kingdoms" in economics which guard their interests and those kingdoms are supported
by state (the Fed is just one example of such support). This phenomenon is not new and
is called Lysenkoism. Moreover, the fact the neoclassical economics became dominant economic
paradigms make is probably one of the most important demonstrations of the fact that Lysenkoism
did nor die with the USSR.

In view of this Waldmann's complain about lack of sourcing is completely naive: IMHO few
of actually working economists will discuss openly this issue. Ostracism is easy as academic
journal space is a very scarce resource.

BTW the unverified argument that Waldman's own articles were supposedly never rejected make
his critic even more disingenuous that otherwise. Talent always face opposition from the
defenders of status quo or current scientific paradigm as
Thomas Kuhn explained.
IMHO the only way to have articles never rejected is to became a sycophant of one of the "tsars"
of dominant economic school,

A new column that examines the intersection between science and society provides an update on the
historic essay

There is another factor, one that was on display at the World Science Festival in New York City
this summer, which helps to undermine the role of science in society. Amid events
on the cosmos, modern biology, quantum mechanics and other areas at the forefront of science, I
participated in a panel discussion on science, faith and religion.

Why would such an event be a part of a science festival? We accord a special place to religion,
in part thanks to groups such as the Templeton Foundation, which has spent millions annually raising
the profile of "big questions," which tend to suggest that science and religious belief are somehow
related and should be treated as equals.

The problem is, they are not. Ultimately, science is at best only consistent with a God that
does not directly intervene in the daily operations of the cosmos, certainly not the personal and
ancient gods associated with the world's great religions. Even though, as physicist Steven Weinberg
has emphasized, most people who call themselves religious tend to adhere to only those bits
and pieces from scripture that appeal to them, by according undue respect for ancient religious
beliefs in general, we nonetheless are suggesting that they are on par with conclusions that have
been drawn from centuries of rational empirical investigation.

Snow hoped for a world that is quite different from how we live today, where indifference
to science has, through religious fundamentalism, sometimes morphed into open hostility about concepts
such as evolution
and the big bang.

Snow did not rail against religion, but ignorance. As the moderator in my panel finally understood
after an hour of discussion, the only vague notions of God that may be compatible with science
ensure that God is essentially irrelevant to both our understanding of nature and our actions based
on it. Until we are willing to accept the world the way it is, without miracles that all
empirical evidence argues against, without myths that distort our comprehension of nature, we are
unlikely to bridge the divide between science and culture and, more important, we are unlikely to
be fully ready to address the urgent technical challenges facing humanity.

Note: This article was originally printed with the title, "C. P. Snow in New York."

===

Dr Huddleston:

It is true that a god who does not intervene in the natural world in any manner is compatible
with science. But why stop with gods? You can postulate any entity you want with equal plausibility,
so long as that entity never interacts with our reality. And nobody will fault you for that, as
long as you refrain from

1) indoctrinating children in your arbitrary choice of faith

2) denigrating other people's choices because they conflict with the opinions of your imaginary
friend

3) imposing your baseless beliefs on others through violence and law.

Unfortunately, these things are exactly what many people experience as "religion". If you want
atheists to remain silent while you spread a system of beliefs that proclaims them sinners who are
destined for eternal torment unless they recant, you need a stronger argument than the mere absence
of absolute disproof.

===

"Judeo-Christian" doctrine is a cover phrase for "Evangelical Christian." It's been disproved
as a legitimate term for nearly two decades in cultural anthropological circles. The two religions
as modes of thought ("doctrines") are distinct and different: Among other things, Judaism employs
a reverence for intellect, argument and "play" with its sacred texts, and has an historical ever-evolving
notion of "G-d" while Christianity employs a reverence for stasis, predetermination, anti-intellectualism,
anti-science, cultural-theological curbs on argumentation or debate, and "play" vis-a-vis its sacred
texts means 'leave it alone' and 'God says...'

Historically the connections between the two loosely related religions have been construed by
Christians as siblings while Jews see no similarity other than the Christian cultural theft or texts
and personalities.

It goes without saying that from an atheist POV, both of those traditions are rife with problems
that the intersection of science and cultural anthropology often resolves and thus should suggest
alterations thereto. This is actually the fundamental problem with "beliefs"; in many religionisms
beliefs dictate empirical facts. Krauss seems to be simply making the observation that if
one cannot change beliefs to fit the facts, therein lies the gap between science and religion.
That's religion's fault. If that feels "insulting" to good scientists like Huddleston, the rest
of us simply have to throw up our hands at the impasse of the religionists' own making.

I know it may be tough for a PhD in physics at a religious (Christian) college to appreciate
a humanities oriented distinction but, it's the 21st century and time to drop historically inaccurate
canards like "Judeo-Christian." It would be nice to discuss science & culture consistent with at
least anthropologically accurate terminology.

===

katherinebiel at 11:27 AM on 08/31/09

Science is accomplished by breaking down a problem into measurable variables. Whether or not
a person believes in God is not part of this 'art' (and yes, I believe the crafting of a good
study is an art). The problem with God is that the belief, or the concept, or the deity-whatever
on wishes to call it, slops over the parameters of the study. Speaking from the position of
a scientist, unless we know exactly the rules by how 'God' works, and take those into account,
we cannot explicitly put God into a study! Right now, if one believes in God, it goes into the
random error category of a study, because it must according to the rules of science.

*sigh* I guess its a sort of cultural joke. I'm sad that some people won't get it, or will
take it the wrong way. I'm sad that although so many people seem to hate science, they use the
discoveries of science in their lives every second of every day, and to further their belief
systems.

Many of us scientists are artists of one sort or another, often later in our lives (when we
aren't working 80-90 hour weeks) and we discover music and the visual arts. Snow would be pleased.

By a joke, I meant more of a mental exercise, putting an all powerful, natural world breaking
deity into an experiment......It would make the results of experiments uninterpretable, if we
always concluded that an experiment worked, or didn't work because God intervened.

Neoconservatives have expressed sympathy for "intelligent design theory," that is, creationism.
This is well documented by
Ronald Bailey's article in "Reason on line." Bailey discusses why neoconservatives might claim
they don't believe in evolution by natural selection even though there is no scientific basis for
that view.

update: link corrected thanks to VtCodger in comments.

Mainly, he suspects that it is a Strussian "noble lie," roughly that they believe that fundamentalist
religion is needed for the good of society, so they pretend to agree with it. He mentions, but is
not very fascinated by, the idea that this is partisan hackery -- that neoconservatives think the
interests of the Republican party would be harmed if they didn't bend their knees before the fundamentalists.
Of course the problem is that once one decides to lie, it is very hard to decide exactly how noble
to be about it.

He doesn't mention the collosal arrogance of people who assume that biologists don't know anything
relevant about biology which they don't know. I think this is always a risk in people coming from
law or social sciences. They just have no clue how much evidence lies behind the claims of natural
scientists and assume that they can bluff their way past biologists as they have successfully bluffed
their way past say economomists.

In the second part of his article, Bailey argues that there is no scientific case against evolution
by natural selection. Naturally it would come first, one normally doesn't question someone's honesty
until one has exausted other options (although the NeoCons he quotes are pretty up front about how
they start with the conclusion and work back to the evidence). I think the editorial decision makes
sense as most Reason on Line readers don't really need to be convinced that modern biology is not
all a big mistake.

I think Bailey's arguments for Darwin are weaker than his earlier analysis—not because he doesn't
make a convincing case, but because he buries the lede. Basically he has a theoretical disagreement
with a mathematician, then speculates about the origin of life, then asks if one can be both a Christian
and a Darwinist (hint yes) and only then discusses some of the evidendence for evolution by natural
selection.

But Berlinski stoutly declares in Commentary that he is no creationist. He claims merely to
be engaged in critiquing the failures of Darwinism. Berlinski is particularly savage about what
he regards as Darwinism's tautological character. "Time and again, biologists do explain the
survival of an organism by reference to its fitness and the fitness of an organism by reference
to its survival, the friction between the two concepts kindling nothing more than the observation
that some creatures have been around for a very long time."

In Berlinski's view, evolutionary
theory simply says that the ones that survive are the ones that survive. But that is not quite
right. But that is not quite right. Darwinian natural selection sifts for useful variations
among mutations, thus natural selection generates increased fitness, not just preserving the
fittest. This process generates new species, species B being the descendant of earlier species
A. This claim is clearly more than a tautology.

Wrong Bailey, the way to argue that something isn't a tautology is to point out a testable implication.
Instead Bailey claims the stated theory is not quite right because it didn't include the word "species"
even this explanation is incorrect (see below*) but the main thing is that the theory of evolution
by natural selection has testable implications because organisms have detectable features which
don't make any detectable difference.

The evidence for the theory became vastly vastly enormously gigantically even more immense than
it was already when biologists began sequencing DNA. They found patterns explained by the idea some
sequences don't matter and drift faster than others which do. Based on those sequences they can
redraw the family tree of living things and lo and behold it almost exactly matches the tree drawn
based on other features and based on fossils. Oh and one can check that the sequences that don't
seem to matter don't matter and, so far, they don't. Before sequencing the evidence was weaker but
already overwhelming based on traights which didn't seem important.

There might be another explanation for these facts, but no one has ever pretended to have one.
Instead critics of biology like Berlinski and Kristol just ignore the evidence entirely. Bailey
mentions it long after speculating at length about the origin of life (OK and I began indignantly
typing before I read that far).

Berlinksi's claim is, I think, false as a matter of fact. Biologists do not claim that the survival
of this or that species is evidence in favor of evolutionary biology. The evidence all concerns
trivial things which are considered evidence of evolutionary history exactly because they have tiny
or zero effect on fitness.

The quote of Berlinski (all I have read of his writings) does not disprove the hypothesis that
he thinks that modern evolutionary biology is completely summed up by the phrase "the survival of
the fittest." That is, indeed, a tautology. It is indeed part of the subtitle of "The Origin of
Species." But I mean, to be fair to Darwin, one should at least read the full subtitle. Oh and maybe
glance at the book. And to be fair to evolutionary biology, one would have to note that much evidence
has been collected since then (not to mention the theory has developed).

I have Popper in the title, because Popper did the same damn thing in "The Open Society and Its
Enemies." Popper at least asserted that something wasn't there -- predictions which have since been
confirmed, explanations of puzzling facts, you know non tautological science -- which absolutely
wasn't there. Popper, I think, assumed that he was brilliant enough to know what is written in a
book after reading part (not all) of its subtitle.

* I think a biologist tried to explain this to Bailey and he didn't get it. The non tautological
point is that the descendents of species A might belonge to species B and C two different species
present at the same time. Now the claim that two different organisms belong to different species
is *not* mere terminology -- it has an operational definition -- orgnaisms from two different species
can not produce fertile offspring descended from both of them.

If evolution were always new species A replacing now extinct species B, then all we would know
is that we choose to use different words for organisms of type A and B. Without a time machine,
we can't test if they are two different species.

Now "survival of the fittest" does not logically imply that one species can, over time, split
into two. This is a radical idea. It is also, in principle, experimentally testable, although the
experiment will take a long time.

I personally think the experiment is under way and it is already clear that one species can split
into 2 much more quickly than evolutionary biologists imagined. The experiment is raising fruit
flies in laboratories. They are used to study genetics. Normal non mutant flies are called "wild
type" but their ancestors haven't been wild for about a century now. They have been bread in labs
from each other.

Interestingly when an actual wild male captured in the wild is mated with a lab bread "wild type"
female, something happens called "hybrid disgenisis" which means the offspring are messed up. It
is known that this is caused by a transposon (basically a very very benign virus) which keeps itself
inactive in the

genome of wild fruit flies by making a repressor protein. None of that protein gets into spermatazoa
so if the transposon is in one of the male's chromasomes it makes copies of itself and spreads them
around inside the chromasomes of the fertilized egg.

Evidently the transposon spread through the wild population after the ancestors of the lab flies
were captured.

Some of the offspring survive this process. But already there is a barrier between wild and lab
fruit flies after about one century. One can imagine that another hundred years or so, wild males
will not be able to produce fertile offspring with lab bread females (just a few more such latent
virus like things would do it).

Now to get two whole species it has to be blocked the other way too and the lab population is
very isolated (also from other insects) and divided among labs so I mean maybe experimental speciation
won't occur in my grandchildren's lifetime. But it's really close.

Another thing that must be pointed out: given the anti-regulation ideological bias of the economics
profession as a whole, it's not hard to imagine that studies that do find that the minimum wage
has a disemployment effect are considerably more likely to be published. I'm not accusing anyone
of scholarly fraud here. But the fact is, there are lots of different datasets you can use, lots
of models to go with, lots of variables to include or leave out, and lots of ways to slice and dice
the data. It's not unheard of for researchers to opportunistically try different models and methodologies
until they hit upon one that gives them the results they want.

Here is what economist Edward Glaeser
had to say in a recent paper about researcher incentives and empirical methods:

Economists are quick to assume opportunistic behavior in almost every walk of life other
than our own. Our empirical methods are based on assumptions of human behavior that
would not pass muster in any of our models. The solution to this problem is not to expect a
mass renunciation of data mining, selective data cleaning or opportunistic methodology selection,
but rather to follow Leamer's lead in designing and using techniques that anticipate the behavior
of optimizing researchers.

Indeed, Krueger and Card have written a
paper
that provides strong evidence that "specification searching and publication bias" have led to an
overrepresentation of studies that find that the minimum wage has a statistically significant disemployment
effect. The ideological character of much of the economics profession in the United States
suggests that there are rewards for producing scholarship that confirms the idea that the minimum
wage causes unemployment, and punishment for scholarship that finds otherwise.

David Card, a highly regarded economist at Berkeley (among other honors, he won the John Bates
Clark Prize, a prestigious award given every two years to the most outstanding economist under 40),
has produced many of the best studies taking issue with the old conventional wisdom about the minimum
wage. But he stopped studying this subject, to a large degree because the reception his research
got was so hostile in some quarters of the economics profession. He
said:

I've subsequently stayed away from the minimum wage literature for a number of reasons. First,
it cost me a lot of friends. People that I had known for many years, for instance, some of the
ones I met at my first job at the University of Chicago, became very angry or disappointed.
They thought that in publishing our work we were being traitors to the cause of economics as
a whole.

"Traitors to the cause of economics as a whole"! Those are strong words, especially coming from
someone who seems, on the basis of interviews at least, to be a fairly mild-mannered, non-drama-queen
kind of guy. And if someone who's a tenured full professor and one of the leading lights in his
field took so much heat that he abandoned this line of research, what do you think the chances are
that aspiring Ph.D.s and ambitious young assistant professors are going to touch this issue with
a ten-foot pole?

I mentioned before that I found some of the criticisms by Murphy et al. of the 1994 Krueger and
Card study to be quite legitimate. But they made other criticisms that have not been so reasonable.
Here is Murphy et al.
on what economic theory has to say about the minimum wage:

The implications of the theory are also simple and direct. The prediction that an artificial
increase in the price of something causes less of it to be purchased is the most fundamental
prediction of economics; it is called the law of demand.

Well, actually, it's not so clear that an "artificial" increase in price will necessarily cause
less of the good to be purchased. For one thing, it depends on the elasticity of demand for the
good. If demand is perfectly inelastic, an increase in price would not lead to a decrease
in demand.

More importantly, though, it's a huge mistake to view the purchase of a unit of human labor as
being exactly the same as the purchase of a widget. What economics has done is to take the models
of the supply and demand of consumer goods and apply them to the supply and demand of labor. This,
I believe, is fundamentally wrong-headed. Human labor and consumer goods are categorically different,
and it's a big mistake to treat them as if they were interchangeable. There are a slew of institutions,
norms, and other features of labor markets that do not apply to product markets.

Obstfeld and Rogoff would have been as clueless
about the logic of temporary fiscal expansion as these guys have been. Freshwater macro became totally
insular.

And hence the most surprising thing in the debate over fiscal stimulus: the raw ignorance that has
characterized so many of the freshwater comments. Above all, we've seen the phenomenon of well-known
economists "rediscovering" Say's Law and the Treasury view (the view that government cannot affect
the overall level of demand), not because they've transcended the Keynesian refutation of these
views, but because they were unaware that there had ever been such a debate.

It's a sad story. And the even sadder thing is that it's very unlikely that anything will change:
freshwater macro will get even more insular, and its devotees will wonder why nobody in the real
world of policy and action pays any attention to what they say.

I am not quite as pessimistic
about the prospects for change, but many people have their life's work wrapped up in a particular
brand of model and they will defend that work aggressively, so I do agree that it's likely to come
in spite of rather than because of the old guard.

Kaleberg says...

I remember when Malcom Forbes died and his son took over his magazine. At first, it didn't change
much, but after perhaps a year it lost touch with reality. The articles were all dogma and mindless
sloganeering. It suddenly felt horribly familiar. As far as I could tell I was reading a rehash
of Pravda. Needless to say, I canceled my subscription.

Freshwater economists and communist economics have much in common than people like to admit.
Neither admits reality and both scorn the facts and any critics. They like to think of themselves
as opposite poles, but for anyone living on this here earth they were hard to distinguish. The communists
brought down the Soviet empire and the freshwater economists are doing their bit to destroy ours.

Bruce Wilder says...

One aspect of this "debate" that has me a little curious is the way in which the antagonists
have come down to the wordy, fuzzy, hand-waving, sloganeering, semi-philosophical level, where I
live, to have this fight.

Cochrane was actually very angry about the fact that Krugman used "casual" or "popular" expressions
of various freshwater types to illustrate his critique, rather than fairly cite the high theory
on its own terms: "Paul isn't doing his job. He's supposed to read, explain, and criticize things
economists write, and real professional writing, not interviews, opeds and blog posts."

In Cochrane's criticism of the Obama stimulus proposal early in the year, he exposed the conflict
between his passionate ideological commitments, where he felt obligated to re-assert the usual conservative
shibboleths, on the one hand, his capacity to understand the Keynesian argument on the other. Ideology
won out.

But, it raises three points, that I think are important.

One is that, if economics, as a carefully and meticulously vetted way of thinking and assembly
of verified facts, is to usefully inform the public discourse, then what one says in op-eds and
interviews has to be consistent with the discipline's knowledge.

A second is, that in the public discourse, one ought to be able to state, or re-state, accurately
the opponent's view. This is SOP in academic reviews and panels. Yet, conservatives seem to think
that it is acceptable, or tactically useful, to deliberately misunderstand progressive arguments.
Deafness as a tactic.

A third is that, I suspect, that things have been structured in academic circles, in the realm
of high theory and professional research, so that this conflict can never play itself out. It can
happen now, in the public policy discourse, because there's a vital public policy problem, that
demands a realistic response.

But, in normal academic dispute, things are set up in various ways, to prevent anyone from winning
the argument. The argument goes on. But, even when someone is wrong, they don't admit it, and don't
have to, and even neutral observers don't have to acknowledge it. Even the existence of a fundamental,
if unsettled problem is not acknowledged. An orthodoxy is confirmed in administrative control of
journals and departments; a pathetically impotent methodology is adopted. And, inconvenient "facts"
are simply ignored.

I've made myself read what Cochrane has written and made available to the general public this
year in this dispute. I don't think he's clueless. He can follow the Keynesian argument. But, he
has very strong ideological commitments that conflict with acknowledging the Keynesian argument,
and, like a lot of conservatives, who follow in the tradition of Milton Friedman (and Cochrane is
doing so, explictly), it is A-OK to affirm your ideological commitments in popular writing, without
regard to making it fully consistent with your professional knowledge.

Economic analysis, as done in the page of the New York Times Sunday Magazine, is not going to
be as sophisticated and subtle as it might be in a professional or academic forum. But, what are
the rules that relate the fora? And, why is this controversy playing itself out in the plebian blogosphere?

gordon says...

Well, there is the "life's work" theory and I wouldn't discount it. But there is also ideological
bias disguised as objective research, and I wouldn't discount that, either. Kathy G. in this old
post

discusses it, and quotes David Card on why he stopped publishing on minimum wages and employment.
She quotes him as saying:

"I've subsequently stayed away from the minimum wage literature for a number of reasons. First,
it cost me a lot of friends. People that I had known for many years, for instance, some of the ones
I met at my first job at the University of Chicago, became very angry or disappointed. They thought
that in publishing our work we were being traitors to the cause of economics as a whole".

It seems pretty clear to me, at least, that the role of Govt. in the US economy was an issue
that was bitterly fought out in the 1930s and will have to be as bitterly fought out again. I don't
see that is because of economics itself, but because of social and political developments and how
they interact with the economics profession.

A reader sent me this
article from PhysicsWorld,
which considers the nature of scientific innovation. I particularly agree with Smolin's comments
excerpted below. The reward structure of academic science encourages narrow specialization far too
much. Tremendous lip service is paid to interdisciplinary work, but in actuality it is very risky
to undertake.

Using Smolin's analogy of hill climbing, the dominant strategy today in science is:

1) self-assess own climbing ability
2) choose suitable hill (perhaps inherited from advisor!)
3) climb to local maximum (write some relevant papers with incremental results)
4) squat on hilltop and defend against all attackers (make sure everyone cites your papers; get
embedded in small community of researchers defending that hill)
5) train students and postdocs on your hilltop while secretly wishing you understood what other
people were doing on their hilltops -- suppressing the curiosity that originally got you into science.

From personal experience, I can tell you that as soon as you leave your little hill to cross
a valley and explore somewhere else, the citations of your previous work will plummet, inhabitants
of other hills will try to repel you, and funding agencies will ask why you aren't doing mainstream
stuff ("he's not serious -- he keeps jumping around"). Based on this incentive system, it is easy
to understand why people behave as they do.

...returns on research investment do not arrive steadily and predictably, but erratically and
unpredictably, in a manner akin to intellectual earthquakes. Indeed, this idea seems to be more
than merely qualitative. Data on human innovation, whether in basic science or technology or
business, show that developments emerge from an erratic process with wild unpredictability.
For example, as physicist Didier Sornette of the ETH in Zurich and colleagues showed a few years
ago, the statistics describing the gross revenues of Hollywood movies over the past 20 years
does not follow normal statistics but a power-law curve — closely resembling the famous Gutenberg—
Richter law for earthquakes — with a long tail for high-revenue films. A similar pattern describes
the financial returns on new drugs produced by the bio-tech industry, on royalties on patents
granted to universities, or stock-market returns from hi-tech start-ups.

What we know of processes
with power-law dynamics is that the largest events are hugely disproportionate in their consequences.
In the metaphor of Nassim Nicholas Taleb's 2007 best seller The Black Swan, it is not the normal
events, the mundane and expected "white swans" that matter the most, but the outliers, the completely
unexpected "black swans". In the context of history, think 11 September 2001 or the invention
of the Web. Similarly, scientific history seems to pivot on the rare seismic shifts that no-one
predicts or even has a chance of predicting, and on those utterly profound discoveries that
transform worlds. They do not flow out of what the philosopher of science Thomas Kuhn called
"normal science" — the paradigm-supporting and largely mechanical working out of established
ideas — but from "revolutionary", disruptive and risky science.

Squeezing life out of innovation

All of which, as Sornette has been arguing for several years, has important implications
for how we think about and judge research investments. If the path to discovery is full of surprises,
and if most of the gains come in just a handful of rare but exceptional events, then even judging
whether a research programme is well conceived is deeply problematic. "Almost any attempt to
assess research impact over a finite time", says Sornette, "will include only a few major discoveries
and hence be highly unreliable, even if there is a true long-term positive trend."

This raises an important question: does today's scientific culture respect this reality?
Are we doing our best to let the most important and most disruptive discoveries emerge? Or are
we becoming too conservative and constrained by social pressure and the demands of rapid and
easily measured returns? The latter possibility, it seems, is of growing concern to many scientists,
who suggest that modern science is in danger of losing its creativity unless we can find a systematic
way to build a more risk-embracing culture.

The voices making this argument vary widely. For example, the physicist Geoffrey West, who
is currently president of the Santa Fe Institute (SFI) in New Mexico, US, points out that in
the years following the Second World War, US industry created a steady stream of paradigm-changing
innovations, including the transistor and the laser, and it happened because places such as
Bell Labs fostered a culture of enormously free innovation. "They brought together serious scientists
— physicists, engineers and mathematicians — from across disciplines", says West, "and created
a culture of free thinking without which it's hard to imagine how these ideas could have come
about."

Unfortunately, today's academic and corporate cultures seem to be moving in the opposite
direction, with practices that stifle risk-taking mavericks who have a broad view of science.
At universities and funding agencies, for example, tenure and grant committees take decisions
based on narrow criteria (focusing on publication lists, citations and impact factors) or on
specific plans for near-term results, all of which inherently favour those working in established
fields with well-accepted paradigms. In recent years, tightening business practices and efforts
to improve efficiency have also driven corporations in a similar direction. "That may be fine
in the accounting department," says West, "but it's squeezing the life out of innovation."

...But physicist Lee Smolin, currently at the Perimeter Institute, suggests that science
overall requires a much broader and more coherent approach to risky science. To see the kinds
of policies needed, he suggests, it is useful to note that scientists, at least in some rough
approximation, follow working styles of two very different kinds, which mirror Kuhn's distinction
between normal and revolutionary science.

Some scientists, he suggests, are what we might call "hill climbers". They tend to be highly
skilled in technical terms and their work mostly takes established lines of insight that pushes
them further; they climb upward into the hills in some abstract space of scientific fitness,
always taking small steps to improve the agreement of theory and observation. These scientists
do "normal" science. In contrast, other scientists are more radical and adventurous in spirit,
and they can be seen as "valley crossers". They may be less skilled technically, but they tend
to have strong scientific intuition — the ability to spot hidden assumptions and to look at
familiar topics in totally new ways.

To be most effective, Smolin argues, science needs a mix of hill climbers and valley crossers.
Too many hill climbers doing normal science, and you end up sooner or later with lots of them
stuck on the tops of local hills, each defending their own territory. Science then suffers from
a lack of enough valley crossers able to strike out from those intellectually tidy positions
to explore further away and find higher peaks.

I am wondering how CNBC clowns can hold a Ph.D without making economic PH.Ds a joke...

I am writing to offer a comment on scientific integrity. As we know, it is important that
those whose work is used to provide a scientific basis for policy decisions reveal the sources
of their funding so as to avoid conflicts of interest or undisclosed potential bias. This stipulation
has made gradual progress in the medical sciences in particular -- something for which we should
all be grateful. Unfortunately, in my own field of economics no one makes or enforces such a
rule. Economic analysis often plays a central role in decision-making, and economists are often
funded by interested parties, but disclosure is nonexistent. It is unlikely that the economics
profession will take the lead in remedying this situation, so we have to look to our clients.
If OSTP would take a clear stand on this matter it would improve the credibility of analysis
entering the regulatory process and would also have a salutary effect on the profession itself.

UPDATE: The rules for biomedical researchers
may be tightening.
Why can't we do this for economists?

Following in the tradition solidified by Samuelson (1947) during the second half of the twentieth
century, there have been two trends amongst neoclassical economic theorists. The first is that neoclassical
economists increasingly devise compelling, mathematically elegant hypotheses with little interest
in their policy implications. The second is their reluctance to engage in conversation with alternative
paradigmatic schools (eg. feminists, Marxists, Institutionalists or Post-Keynesians). In doing so
they have become, as Samuels recently noted in this Journal, "anti-intellectual, believing that
economics is only, or primarily, a set of techniques" (Samuels 1996: 308). Their lack of concern
about being unaware of what it is that they don't know, is what I identify as ignorance-squared.

In January 1996, a group of "heterodox economists" made a presentation to the publishing Committee
of the American Economics Association responsible for the American Economic Review, Journal
of Economic Literature, and the Journal of Economic Perspectives. Anne Mayhew, editor
of the Journal of Economic Issues, speaking before the Committee, argued that not one of
the publications of the Association conform to the model of scientific inquiry to which the profession
pledges allegiance. She cogently argued that a small group of economists have "captured" these journals
to promote mathematical complexity at the expense of issues, which incorporate "history, institutions
and power". Further, the prestige of the Association and the journals is used "to narrow the discipline,
to reward the excessive technical training of the prestigious graduate schools, and to stifle the
advance of heterodox approaches to economics". Finally, she noted the curious state of affairs that
whereas most economists do not read the American Economic Review, most want to publish an article
there in order to advance their careers! (Mayhew 1996)

Clive and Cara Beed have also shown how "quality journals" (predominantly neoclassical) are being
used to set standards for both recruitment and promotion (Beed and Beed 1996). It is becoming commonplace
for journals to be hierarchically ranked, using a range of diverse standards for policy purposes
in the academic industry. The implication is that it is no longer sufficient for academics to publish
their ideas; rather it is now necessary to publish in journals that, as Mayhew asserts, they most
likely don't read. Beed and Beed argue that it is not pedagogically sound to rank journals since
ranking reveals little more than the mainstream's view of itself. More strongly, they, and others,
suggest that, an interpretive, hermeneutic view would be that it is contradictory to imagine that
the ideas of social science can be evaluated in any objective quality sense at all (Bohman 1991).

In what follows, the content and causes of Mayhew's and the Beeds' articulated frustration is
pursued. Recent literature on the production of knowledge and ignorance-squared is discussed and
then used to investigate neoclassical economic knowledge. Subsequently, it is argued that it is
fruitless to appeal to neoclassical theorists to become more methodologically pluralist or to enhance
their rhetoric. It is concluded that, although a number of causes exist for the intellectual narrowing
of the discipline, a fundamental answer to the query "why is this the case?" may be found in Gramsci's
notion of ideological hegemony.

Ignorance-Squared

"The more I study economics the smaller appears the knowledge I have of it... and now
at the end of half a century, I am conscious of more ignorance of it than I was at the beginning."
(Alfred Marshall, quoted in Schumpeter, 1941: 248)

The usual methodological question in economics is, "how can one tell whether a particular bit
of economics is good science?" (Hausman 1989:115). Herein is pursued a somewhat different sociological
question which is not how to come to know what one doesn't know, the form of ignorance acknowledged
by Marshall in the quote above; but why it is the case that neoclassical economists don't want to
be aware of what it is that they don't know, which is subsequently defined as ignorance-squared.

"Ignorance", is discussed herein as the antonym of knowledge, ie. lacking knowledge or information
as to a particular subject or fact. The term is not meant in a derogatory manner, but rather, is
normally ascertained as the starting point in the quest for knowledge. As reflected in recent literature
on ignorance-squared "(T)he greatest achievement of science… is the discovery that we are profoundly
ignorant; we know very little about nature and understand even less" (Kerwin 1993: 174). Economic
theories provide a formal expression of our perception of reality and all knowledge is produced
through social interaction (Berger and Luckmann 1967; Bloor 1976). Ignorance does not imply merely
a lack of knowledge, but also the possibility that its antonym is being produced. To supplement
this assertion, it is argued that neoclassical economists, as traditional intellectuals, cultivate
the social production of ignorance in the struggle for ideas. This is done through narrow pedagogy,
delineation of research parameters, and by constraining the production and presentation of non-neoclassical
knowledge.

Training in textbook economics and economic research systematically fosters ignorance-squared,
in that students and researchers are shielded from any acquaintance with problems outside the domain
of successful puzzle solving. The curriculum is always crowded with the positive heuristic of neoclassical
economics; there is always too much to teach. There is never time for reflection, for perspective,
for the cultivation of awareness, and most importantly, for the presentation of other contentious
viewpoints, much less for the knowledge produced outside the disciplinary boundaries. When neoclassical
economists restrict their own discourse, as well as their students' ability to engage with others
of the same, or related specialties, then "ignorance-squared", in the manner put forward by Ravetz
(1993) is enhanced.

In neoclassical economic terms, the marginal cost of the search for particular knowledge increases,
and can be prohibitively high (Wible 1995: 303). But what is not clarified by neoclassical economics
is that in any social formation the allocation of resources to the production of knowledge will
be determined, as are other resource allocations, through struggle, and in that struggle, both knowledge
and ignorance are produced dialectically. Therefore, dominant and subordinate positions are reflected
by the various paradigms within the discipline, ideologically and politically.

We are all ignorant in a variety of ways, to various degrees, with respect to specific issues,
problems and questions. In fact, it is the increasing awareness of our ignorance of what there remains
to know that is most special about the learning process. A taxonomy of ignorance provided by Smithson
(1989:9; and 1993:135) suggests a variety of forms:

All the things of which people are aware they do not know (the most recognised form of ignorance);

All the things people think they know but do not (ignorance based on error);

All the things of which people are not aware that, in fact, they do know (intuition);

All the things people are not supposed to know but could find helpful (taboo);

All the things too painful to know (psychological suppression of memory); and

All the things, of which people are not aware that they do not know (ignorance-squared).

Of particular interest is the latter (ignorance-squared). There is nothing necessarily negative
about the fact that we proceed through life unaware of most of what there is to know. What is argued
however, is that neoclassical economists promote ignorance-squared. So as not to suggest this promotion
is solely limited to economists, the reader is referred to an analogous process for physical science,
as discussed by Olwell (1996). There are many obvious reasons why this process exists, some of which
are intuitive. Although a query as to "why this is the case is notoriously slippery in that it reflects
an appeal for simplistic reductionism, an explanatory form of reductionism can offer a prioritised
list of causal explanations.

To illustrate, there are numerous reasons for promoting ignorance-squared. Given the search costs
combined with specialisation, there is only so much time to devote to methodological issues. Therefore,
the dominant paradigm will draw the attention of most scholars. Moreover, the more a system (of
thought) is entrenched, and the longer the time it has been operating, the more difficult and expensive
it becomes to change that system (Collingridge 1980). Likewise, the more a person has invested in
the training required to be admitted to the neoclassical coterie, the more it is in that person's
interest to prevent the depreciation of knowledge threatened by alternative modes of discourse.
Another reason may be the appeal of elegant mathematically constructed neoclassical axioms. For
instance, Einstein's theory of relativity became the standard textbook theory of gravitation in
the 1920s. Yet, it wasn't until the 1950s that radar and radio astronomy became sophisticated enough
to generate and test the theory via precise predictions with experimental uncertainties less than
one percent. The general acceptance of the theory in the intervening 30 years had been largely attributed
to its beauty (Weinberg 1992: 98), similar to the dominance of general equilibrium theory in economics
in the second half of the twentieth century. Given the conceptual apparatus of ignorance-squared,
let us now examine the production of economic knowledge that incorporates simultaneously, the production
of ignorance.

Economic Knowledge

"The aim of scientific discourse is profoundly argumentative and not merely expository;
[that] the goal is to persuade readers, to convince them of the validity and importance
of the work, and to motivate them to acknowledge the force of the contribution by explicitly
accepting and building upon it" (Charney 1993:204)

Neoclassical economists normally treat economic instability as the effect of exogenous, stochastic
factors even though nonlinear economics suggests that what may previously have been considered exogenous,
or random, may more likely be endogenous to capitalist social formations. As such, economic fluctuations
are seen as created by the processes of capitalism itself (Baumol and Benhabib 1989; Savit 1988).
This is certainly not a new idea. Marx, Keynes, Hicks, Harrod, Kaldor and Hayek all considered causes
for instability which were endogenous (Zarnowitz 1985). And in most of these cases the instability
was created by a nonlinear feedback process such as the Keynesian "formation of expectations" (Gans
1991:42). Generally speaking, a nonlinear system must be understood in its totality, which means
taking into account a variety of constraints, boundary conditions and initial conditions. These
supplementary aspects of the problem must be included in the study of linear systems, too; but (in
neoclassical economics) they enter in a rather trivially assumed and incidental way (Davies and
Gribbin 1992: 25 and 40).

Examination of empirically defined problems, such as unemployment or inflation, also reflects
irreconcilable differences in the frameworks or worldviews with which these problems are analysed.
Those who believe that the free market is inherently stable and coordinated, with instability the
result of exogenous shocks, largely fall into the neoclassical camp. Those who see endogenous factors,
such as uncertainty or exploitation at work promoting instability, will normally be those working
in a tributary rather than the mainstream (Brown 1981:457-58). With reference to instability, the
crucial issue at odds between the groups is that of equilibrium or the tendency thereto.

Equilibrium theory itself has a number of integral constituents which, while not exclusive, include
rationality, consumer and producer optimisation, malleable capital, decreasing returns, and constant
returns to scale, all of which propound the pre-eminence of the tendency to equilibrium in capitalist
goods, factor and money markets.

The 'rational' consumer of the mainstream economist is a working assumption that was meant to
free economists from dependence on psychology (Simon 1976:131; Tversky and Kahneman 1987). The dilemma
is that the assumption of rationality as intertemporally optimising is often confused with, and
regularly presented as, real, purposive behaviour. In fact, the living consumer in historical time
routinely makes decisions in undefined contexts. They muddle through, they adapt, they copy, they
try what worked in the past, they gamble, they take uncalculated risks, they engage in costly altruistic
activities, and regularly make unpredictable, even unexplainable, decisions (Sandven 1995).

One of the favourite diagrams of producer optimisation in the neoclassical text is the isoquant,
showing a given output produced by different combinations of capital and labour. Different points
on the isoquant represent different techniques of production, with differing capital-labour ratios.
This continues to be presented to students even though neoclassical economics have themselves admitted
that there is no possible way to measure aggregate capital independent of distribution, (Harcourt
1975:5-9; Robinson 1987), that much production takes place with fixed factor ratios, and that what
are most often lumpy decisions are not reversible in practice (Robinson 1980:220).

The inscription of supply and demand into mathematical equations is generated by the assumption
of "diminishing returns". It is becoming more evident that it is "increasing returns" which will
better help us "to understand the messiness, the upheaval, and the spontaneous self-organisation
of the world" (Waldrop 1992:18, 35; Arthur, 1990). The concept of increasing returns is not new
in itself (Arrow 1962; Helpman 1984; Kaldor 1981 and Young 1969). What is new is that Arthur, following
Kaldor's example, places the concept within the context of nonlinearty, instability and disequilibrium.
In his work Arthur divides up the profession into two world views, the neoclassical and the 'new'
economics: neoclassical economics is based on diminishing returns; 19th century deterministic dynamics
approaching equilibrium; homogeneous factors; no externalities; and is structurally simplistic around
the concepts of supply and demand. Alternatively, 'new' economics introduces increasing returns;
is evolutionary; focuses on heterogeneity and externalities; and is structurally complex and ever
changing (Waldrop 1992:38; Bak and Chen 1991). Most students graduate, only having come into pedagogical
contact with the former worldview.

A few neoclassical theorists have broke part of the mould and are incorporating increasing returns
into the analysis of international trade and growth theory (Helpman and Krugman 1985; Krugman 1986;
and Romer 1986). However, Romer, for example, makes it evident that he is not straying beyond the
boundaries, by designing his analysis as, "…a well-specified competitive equilibrium model of growth.
Despite the presence of increasing returns a competitive equilibrium with externalities will exist…and
is capable of explaining historical growth in the absence of government intervention" (Romer 1986:
1003-1004). Nowhere does he emphasise that increasing returns also implies a downward sloping supply
function and the potential of resulting disequilibrium.

We are left with the pre-eminence of equilibrium economics when the balance of supplies and demands
on all spot and futures markets takes place simultaneously, (Hicks 1939; Arrow 1971; and Debreu
1959). In this purely competitive, certain, optimising world of general equilibrium, pure profits
are zero. Before students are permitted to achieve this level of sophistication, they must first
go through the partial equilibrium components of marginal cost and revenue relationships.

As long ago as the 1930s, a number of economists, Means (1935), Hall and Hitch (1939), then Lester
(1946) and Kaplan, Dirlam and Lanzillotti (1958) all cast serious doubt on the general applicability
of the conventional equilibrium analysis of price, (Mueller 1992:151). The mainstream methodological
counter-proposition was that it was not important that individuals did not consciously maximise.
Rather, it was only necessary that they act as if they did (Machlup 1946; Friedman 1953; Kahn 1959).

More recently, Nitzan and Bichler point out (1995 454-455) that modern corporations are not even
"acting as if" they equilibrate marginal cost-marginal revenue to maximise profits. Rather, they
attempt to "beat the average". References to the "average" or "normal" pervade the business literature
- from the analysis of stock performance, through the stacking of country growth rates and risk
premia, to the ranking of corporate profitability. In these terms, according to Nitzan and Bichler,
the primary goal becomes "differential pecuniary accumulation", through which the corporation seeks
to control a "larger share of the societal surplus". Consequently, success has less to do with the
intuitively convincing textbook equality between marginal cost and marginal revenue, than with the
capture of external contested income, thereby redistributing the available social surplus.

As is evident from the above discussion, "whenever (conventional) economics is used or thought
about, equilibrium is a central organising idea" (Hahn 1982). Two fundamental assumptions of the
equilibrium model in economics are 'timelessness' and 'certainty' (Kornai 1971:19-23). Neoclassical
theory deals largely in logical time, which is a period during which whatever needs to happen, will
happen (Henry 1983/84:219). Historical time is assumed away, implying that neoclassical economic
theory has universal applicability (Georgescu-Roegen 1971:134-140).

Conterminously, neoclassical theory reduces uncertainty to a logical construct in which rational
expectations are put forward in order to conform to the demands of equilibration. In contrast, "expectational"
time has been the subject of attention for tributary economic paradigms in which the future is created
and is not the function of deterministic assumptions of rationality (Carvalho 1983/84:269). According
to Shackle, "(E)xpectational time is an aspect of a decision-maker's effort to choose a course of
action in the face of uncertainty about the outcome which would flow from this course or that" (Shackle
1968:67).

One neoclassical defence is to suggest that equilibrium is only a tendency towards which the
system is moving. However, Weintraub (1991) reveals the manner whereby econometricians, such as
Negishi, maintain that the equilibrium contained in a model is real and intuitively justified. They
do this by appealing to the "reality out there…in which it is known that the economy is fairly shock-proof….We
know from experience that prices usually do not explode to infinity or contract to zero…" (Negishi
1962:638-639).

Hutchison has insisted that even "(T)he assumption of a tendency towards equilibrium implies…the
assumption of a tendency towards perfect expectations, competitive conditions and the disappearance
of money" (Hutchison 1938:107). Change, not rest is the characteristic 'state' of capitalism. "The
essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary
process that is in continual disequilibrium. It may seem strange that anyone can fail to see so
obvious a fact long ago emphasised by Karl Marx" (Schumpeter 1976:82).

We are left then, as noted in the assertion of Samuels, with mostly irrelevant elegance and techniques.
Intricate optimisation techniques and equilibrium conditions are heaped on a small set of assumptions
(Mueller 1992:159). A few methodologists, such as Hutchison, Blaug, Friedman, Caldwell and McCloskey,
over the years have attempted to broaden the discussion by seeking methodological norms for both
applied and theoretical economists. Hutchison and Blaug, in line with Popper's dicta, (Hutchison
1938; Blaug 1980; Popper 1959) advocated the adoption of a 'falsificationist' methodology; Friedman
affirmed the benefits to be derived by economists from what has been identified by others as "methodological
instrumentalism" (Friedman 1953; Caldwell 1982: 173-178); Caldwell has pushed the gentility of 'pluralism'
(Caldwell 1988); and more recently, McCloskey (1986) has asked economists (in a most complicated
and discursive manner) to refine their 'rhetoric' (Mäki 1995; McCloskey 1995). Why haven't neoclassical
economists paid much attention?

Economic Method and Social Interests

One might presume that neoclassical economists would most recently have given a sympathetic hearing
to McCloskey's overture for more fruitful exchange in the pursuit of knowledge. On the contrary,
to a large degree McCloskey's plea for communicative rhetoric has been ignored, presumably because
they have little need or desire to communicate with their heterogeneous disciplinary associates.

This lack of desire to engage in conversation with others is then passed on to the next generation.
The motivated tendency to tailor one's opinions in accordance with perceived audience preferences
has been long recognised by social psychologists as a feature of the process whereby people, in
general, form their judgments (Kruglanski 1991:227). The perceived audience for most graduate students
is their neoclassical mentors.

In other words, McCloskey cannot have both meaningful rhetoric and neoclassical economics. If
economists are not articulate, then in terms of their own theory, either they are not optimisers
and are passing up a profitable opportunity, or something in their preference, endowments or technology
makes articulateness unprofitable (Kurdas and Majewski 1994:341). Presuming that economists follow
their own optimising logic, then the lack of need for a more pluralist articulation has to do with
their control over symbolic representation. It should be remembered that, in ideological conflict,
any concession of politeness will contain political concessions as well (Bordieu 1977).

As Mayhew, and Beed and Beed suggest, the exercise of ideological power drives a portion of the
full non-neoclassical transcript underground, in this instance to less reputable heterogeneous journals.
In mainstream discourse, the subordinates (academic workers and students) tend to reveal only what
is "safe" and "appropriate"; that which is delineated by the dominant paradigm or its ideological
purveyors. Total subordinate revelation is only forthcoming in student or worker newspapers or "less
reputable" heterogeneous journals, all treated with condescending contempt by the orthodoxy.

University departments, professional journals and peers form an institutional web, which provides
for the career potential of any aspirant to the profession (North 1990:95). The proficiency shown
in neoclassical tools, concepts and language becomes the hallmark of identification and quality.
The Krueger Commission on Graduate Education, established in the United States to report on tertiary
education standards in 1990, reported that department procedures "bias the selection towards good
technicians, rather than good potential economists". This implies that graduate education de-emphasises
creativity and problem solving as the student requires "little or no knowledge of economic problems
and institutions" (Krueger 1991:1040-42). Consequently, ignorance is promoted as a qualitative manifestation
of a "good economist". The result is that the dominion of organic intellectuals, representing a
class position and propounding its symbolic representation, is solidified. In order to join this
coterie one must accept and disseminate the ideological and political constituents of class power
that it represents.

There is much more than McCloskey would have us understand. Economics is constructed around more
than subjective differences of epistemology, methodological preference or appreciation of elegant
techniques; the differences at the core are also political. Neoclassical economics has represented,
for two hundred years, the political self-representation of autonomous, self-subsistent, and self-interest-optimising
individuals. The populist works of Friedman (1962) in Capitalism and Freedom, or the more
adrenalin-pumping stuff of Ayn Rand (1952 and 1957) in The Fountainhead and Atlas Shrugged
provide adroit examples of the ideological and political content in the grasp of the "Invisible
Hand". It is here where the connection between promoting ignorance-squared and ideological construction
is entwined.

Ideological Construction

And your education! Is not that also social, and determined by the social conditions
under which you educate, by the intervention, direct or indirect, of society, by means of
schools, etc? (Marx 1976: 502).

The gadfly Socrates continues to epitomise the courage of seeking knowledge (Plato 1956). The
attraction of Socrates is that, through his didacticism, we come to realise that the greatest knowledge
we can possess is the awareness of our boundless, fathomless ignorance.

Questioning, wondering, doubting, revising and collaborating are all practices which Socrates
and now McCloskey (1985) would proffer to those interested in expanding the breadth of our knowledge
through communication. Yet, students, and many of their preceptors, do not know that they do not
know that capital cannot be measured; that utility is metaphysical; that optimisation is non-falsifiable;
that capitalism is inherently unstable; or that, as Ricardo discovered, when we say 'supply and
demand' we are explaining nothing (Dobb 1975: 52 and 119). The incentive remains not to find out;
or at the very least, not to recognise the numerous serious-minded non-neoclassical economists who
take all of the above for granted! Rather, mainstream protagonists spend time proving to each other
that what they are doing is what they should be doing; and then convincing the disciples that what
they should be doing is what their mentors are doing, ie., producing "acceptable" knowledge. The
entire process is justified from within by noting that economists are all optimising their utility
functions (Becker 1975).

A student may actually accept what s/he is taught as normal, even justifiable, as part of the
social order. Another may reject the information as "unreal", "incomplete", "too abstract", "not
relevant", or "not falsifiable" and yet have no "realistic" option to present as a critical counter-claim.
In either case, to survive, to pass the course, to increase their potential material enhancement
upon graduation, both types of student must internalise and become technically proficient with what
is served up. At the level of ideas, this symbolic production and re-production of both knowledge
and ignorance-squared is replicated, with or without conscious consent (Gramsci 1971:passim).

This process of ideological domination is portrayed through the solidification of ignorance-squared.
It portrays, as well, a struggle over the appropriation of symbols, a struggle over how the past
and present shall be understood and labelled, a struggle to identify causes and assess blame (Parkin
1971: 79-102). By disseminating a paradigmatic discourse and the concepts to go with it as well
as defining the standards of what is legitimate, a symbolic climate is created that prevents subordinates
from thinking their way free. Thinking "free", is used in the sense that acts are dialectically
interactive with intentions, neither consciousness nor action being "unmoved movers" (Scott 1985:
xvii and 38-39).

Conclusion

Ultimately, economic knowledge, like life, is a process and is none too solid. But then as Ivan
Ilych came to see, neither are we, when, no matter how vigorously he tried to drive thoughts away,
they continued to confront him (Tolstoy 1967:280-281). No matter how hard neoclassical economists
try to drive away the world of complexity, it too continues to confront them. Yet, to the frustration
of "heterogeneous" antagonists the neoclassical paradigm remains dominant, blatantly promoting
ignorance-squared. Elegance and technique have replaced relevance. What has been shown herein
is that the production of that elegance has involved the opportunity cost of simultaneously producing
ignorance. Ignorance-squared is replicated amongst students given the social interests of those
dominant in the paradigm. This process of producing ignorance becomes entwined with the promotion
of ideology to the detriment of us all. McCloskey importunes the deaf, for dialogue with more relevant
tributaries of the mainstream is not in the interests of those presently in control.

The best advice rhetorically should be exactly the opposite provided by McCloskey. Neoclassical
economists should accept the advice of Frederick von Hayek's distant cousin, Wittgenstein, who,
in the final sentence of the Tractatus Logico-Philosophicus, wrote: "Whereof one cannot speak,
thereof one must be silent" (Monk 1991:156 and 224). However, as it has been argued, the ability
to speak and to be heard is based on much more than methodological propositions. They are,
as well, functions of social interests and ideological power.

The clearest example of contemporary trend for the abandonment of the 'scientificmethod'
in favor of either religious or secular faith-systems has resulted in social and economic
catastrophes throughout human history. Perhaps one of the best known recent examples of a 'secular
faith-system' that replaced the 'scientific method' occurred in Soviet Russia, following
the death of V.I. Lenin and the rise of J. Stalin – and the creation of a 'new biology' that
accompanied the collectivization of agriculture, the initiation of the 'purge trials' and the implementation
of the First Five Year Plan (1928-32). The chief architect of the 'new biology' was Trofim
D. Lysenko [Трофим Дисвич Лысéнко] (1898-1976) and the 'new biology' came to be known
as Lysnkoism. Lysenko, born to a Ukrainian peasant family, was educated at the Kiev Agricultural
Institute and worked as an agricultural researcher at an agricultural experimental station in Azerbaijan
during the mid- to late-1920s. In 1927 the official Soviet newspaper, Pravda (Правда
or 'truth') proclaimed that T.D. Lysenko had discovered a method to fertilize fields without using
fertilizers or minerals, and that he had proved that a winter crop of peas could be grown in Azerbaijan,
'turning the barren fields of the Transcaucasus green in winter, so that cattle will not perish
from poor feeding crop of peas, and the peasant Turk will live through the winter without trembling
for tomorrow… (www.en.wikipedia.org/wiki/Trofim_Lysenko.)

The use of the media to proclaim 'scientific truth' and establish a 'politically correct'
set of scientific dogma to advance the goals of the Communist Party of the Soviet Union (CPSU),
and enforced by the power of the state through it's 'apparatchiki' [аппаратчики] (including
the NKVD, forbearer of the KGB or state security [secret] police) does not conform
to the Baconian 'Scientific Method.' Rather, this process is more akin to what John
Milton had written in his Areopagitca (1644) "…the famous Galileo grown old, a prisoner of
the Inquisition, for thinking in Astronomy otherwise than the Franciscan and Dominican licensers
thought." (See: Boorstin, 1983, 317.)

Lysenko was the archetypal 'scientific hero' of the Soviet system, the intellectual counterpart
of Aleksandr Stakhanov (Алекср Стаханов) the 'industrial hero' for whom the Stakhanovite
movement (1935) was named. (For various Soviet terms, see: 'Glossary – Soviet Union;' available
at: //fas.org/irp/world/Russia/su_glos.html.) Such a pantheon of 'Saints' of 'scientific
socialism' provided evidence on the ability of 'Soviet Man' to overcome the economic and technological
constraints imposed by Nature on the Soviet Union, especially its 'continental' and subhumid climates.
The 'science' of Lysenko was based primarily on the work of Lamarck, the 'theory' of "Inheritance
of Acquired Characteristics," as the 'driver of evolution'. Hummm … I guess that this
means that my children will inherit ALL of the knowledge that I have acquired during my lifetime!
As an example of Lysenkoism, his 'scientific' methodology has been reported:

… primary procedure was a mixture of so-called 'vernalization' (by which Lysenko

generally meant anything he did to plant seeds and tubers) as well as hybridization.

During one period, for example, he picked a spring wheat with a short 'stage of

vernalization' but a long 'light stage,' which he crossed with another variety of wheat

with a long 'stage of vernalization' and a short 'light stage.' He did not explain what

was meant by these stages. Lysenko then concluded on the basis of his stage theory that

he knew in advancethat the cross would produce offspring that would ripen
sooner

and as such yield more than their parentsand thus did not have to
test many plants

through their generations. Though scientifically unsound on
a number of levels,

The substitution of Lysenkoism for the 'scientific method' has a number of sources, several have
already been cited above, but all find their origins in the pretenses of Karl Marx
(1818 - 1883) and Frederick Engels (1820 - 1895). Marxism is an economic/political system based
on a mystical 'faith' in the Hegelian dialectical view of history. Friedrich Engels
in his, Dialectics of Nature indicates all is explicable in terms of the 'struggle of opposites'
– the 'laws of dialectics,' the most general laws, which may be reduced to three:

-- the law of the transformation of the quantity into quality and vice versa;

-- the law of the interpenetration of opposites; and

-- the law of the negation of the negation.

All of this nonsense sounds like the religious mystical speculations, such as the 'coincidentia
oppositorum' of late medieval writers, including Nicholas Cusanus (St. Francis of Assisi and
St. Bonaventure), or an exercise in alchemy, as described by Carl G. Jung:

The alchemist's endeavours to unite the opposites culminate in the 'chymical

marriage,' the supreme act of union in which the work reaches its consummation.

(1963, Mysterium Coniunctionis, 89)

Russell Madden has chronicled a number of recent examples of the betrayal of the 'scientific
method' and "The Resurrection of Lysenko" (//home.earthlink.net~rdmadden/ webdocs/Ressurrection_of_Lysenko.html.)
Quoting Robert Conquest's, The Great Terror (1990, 296), who noted, "The triumph of Lysenkoism
was the most extraordinary of all indications of the intellectual degeneracy of the Party
mind…, Madden observed:

While no scientist in our
country has been jailed or murdered due to his beliefs, the

same insidious seeds of intellectual destruction committed in the name of political

agendas have taken root in our society – and in some instances even been nourished

by government officials and policies. Under Soviet style Lysenkoism, it became

evident that '[w]hen encouraged by the political system, quackery prevailed and 'good'

scientists deferred to politically imposed scientific truth.' In recent years, a
similar

substitution of politics for reality as one's standard for truth has made itself
evident in

such areas as environmentalism, economics, and medicine (in its research on gun

ownership, cigarettes, and drugs). [Emphasis added]

Madden is not alone in his criticism of the 'betrayal of the scientific method' and the
substitution for it of 'junk science'. A representative, but far from exhaustive list of
other examples, include:

Deveey. 1980. "Human Population,"
Scientific American

John Maddox. The Doomsday
Syndrome.

Julian Simon. Hoodwinking
the Nation.

Michael Fumento. 1993. Science Under Siege.

John Stossel. 2004. Give Me a Break: How I Exposed Hucksters, Cheats, and Scam

Artists and Became the
Scourge of the Liberal Media…. Perennial Currents.

Madden continues with:

The pattern of distortions, omissions, and lies continues to expand in ripples
as

faulty or fraudulent [sic] research is selected by politically motivated individuals

and used to advance their goals of political control. In press releases
and in the

halls of government, these falsehoods are passed along to a public which often

lacks the knowledge or ability to recognize and refute the pronouncements handed

down by authorities they are instructed to trust. The issue is not simply reasonable

disagreements over interpretations of data and theories. As did their earlier brethren,

the use of naked police power,' i.e., by appealing to government and its monopoly

on force rather than persuasion to achieve their ends.

It is well known in economics that individuals and groups have a tendency to pursue their own
self-interest. Often this is accomplished by pursuing 'rent-seeking behaviors' – Zoltan J.
Acs and Daniel A. Gerlowski have defined 'rent-seeking' as: "

An attempt by some interested party to alter the allocation of rents in a contractual

agreement; in general, does not create value within the organization. (1996.

Managerial Economics and Organization, 448)

In their chapter, "Distribution, Rents, and Efficiency," they have defined 'rents'
as:

…benefits earned by an economic resource that exceed what the resource

could willingly earn else where. (221)

They continue by defining 'economic rents' as:

…the benefits from an activity going to a resource in excess of what is

needed to attract that resource to that activity. (222)

And, somewhat later,

… it is useful to think in terms of rents as being captured by some entity;

both economic and quasi-rents are said to 'go' to some factor of production

or, equivalently, to some party of the exchange.

In a competitive economy, there are no economic rents. The reason is clear.

In a competitive setting, positive economic profits attract entrants who

eliminate all rents in the long run. The obvious exception is, of course,

whether a factor of production is in inelastic (that is, fixed) supply, in which

case rents may exist in the long run. (226)

So, how does all of this 'economic theory' about 'rents' and 'rent-seeking behavior'
relate to the betrayal of the 'scientific method'? Well, it helps us understand the 'how' and 'why'
of both private and public decision-making thereby providing a system of incentives or disincentives,
culminating in the abandonment of the 'scientific method'. Gwartney and Stroup – Principle # 1 Alawys
and everywhere incentives matter.

... ... ...

Capitalism is inherently unstable, i.e., is beset periodically by economic crises,
known variously

as – 'economic downturns', 'recessions', 'depressions', or 'crashes'. The so-called 'market-instability'
is deemed to be a flaw in the free-market system and, therefore needs to be 'corrected' by the direct
intervention of 'the brightest and the best' (aka* the self-appointed, intellectually
superior bureaucrats employed by the government.) This idea had it origins in the pessimistic writings
of Thomas Malthus [especially his: Principles of Political Economy, 2nd Ed. 1836]
and was popularized by Karl Marx and Friedrich Engels [see: below]. These views were accepted as
proven by John Maynard Keynes and those who adopted his theory, thereby justifying ever greater
interventionist government policies. [See: J.M. Keynes. The General Theory of Employment,
Interest and Money (1936/1964)]

John Micklethwait and Adrian Wooldridge, in their widely heralded book, The Company: A Short
History of Revolutionary Idea (2003), in describing the rise of the 'modern company' have identified
several conditions essential for their founding: "First", they note:

was the idea of shares that could be sold on the open market.… the naval

capitalism of the sixteenth and seventeenth centuries dramatically expended

the idea, bringing stock exchanges in its wake. The other idea, which had

occasionally surfaced before was limited liability. Colonization was so risky

that the only way to raise large sums of money from investor was to protect

them.

The first chartered joint-stock company was the Muscovy Company, which

was finally given its charter in 1555. [the reign of Ivan IV or Ivan Groznii]

…the Company was given a temporary monopoly over trade routes to the

Russian port [Archangelsk]…. The company was able to raise enough money

to finance the long journey to Russia by selling tradable shares. (18, emphasis

added)

An essential question that you must ask yourself is: 'Just who had the power and authority
to grant "a temporary monopoly over trade routes"?' For a broader view on the issue
of 'monopoly' and its source, see: Alan Greenspan. 1961. "Antitrust," in Ayn Rand. 1967. Capitalism:
The Unknown Ideal. New York: Signet Book, 63-71. Greenspan in his discussion of the 'westward
expansion of railroads' in the 1860s, and the initiation of governmental regulations, has written:

In the name of 'public policy' it was, therefore, decided to subsidize the

railroads in their move to the West….

As might be expected, the subsidies attracted the kind of promoters who

always exist on the fringe of the business community and who are constantly

seeking an 'easy deal.' Many of the western railroads were shabbily built:

they were not constructed to carry traffic, but to acquire land grants.

The western railroads were true monopolies in the textbook sense of the word.

They could, and did, behave with an aura of arbitrary power. But that power

was not derived from a free market. It stemmed from governmental subsidies

and government restrictions…. (64-5)

…. In the meantime, however, an ominous turning point had taken place in our

economic history: the Interstate Commerce Act of 1887.

That Act was not necessitated by the 'evils' of the free market. Like subsequent

Legislation controlling business, the Act was an attempt to remedy the economic

distortions which prior government interventions had created, but which were

blamed on the free market. (65, emphasis added)

At this juncture it is appropriate to add some observations made by the Nobel Laureate, James
M. Buchanan, that provide further evidence buttressing Greenspan's point:

There are three critical points in Formaini's review of Buchanan's approach to economic relationships:
(i) politicians/bureaucrats are self-interested, not altruistic, decision-makers ['public
servants', as they like to call themselves]; (ii) as such, they engage in 'rent-seeking'
behaviors by trading favors (e.g., legislation that benefits small cohesive 'special interest
groups' at the expense of the majority of the citizens); and (iii) claims that government intervention
in the market place to correct so-called 'market-failures' result in 'government failure'…note the
similarity to Greenspan's conclusions, cited above: "an attempt to remedy the economic distortions
which prior government interventions had created, but which were blamed on the free market.

Somewhat later, Micklethwait and Wooldridge have observed that such a joint-stock, limited liability
company played a major role in the founding of the United States –

The Virginia Company duly raised funds from seven-hundred-odd

Elizabethan 'adventurers,' including Sir Francis Bacon – and

produced, in return, no profits.

…. The risks of investing in voyages to the spiceries of Indonesia

would be akin to the risks of investing in space exploration today.

(19)

After several failed British attempts to send ventures to the East Indies,

It was hardly surprising that the Dutch merchants decided that state-

sponsored collusion was preferable to this. The monopoly that they

eventually secured from the state in 1602 – the Dutch East India

Company, alternatively known as the VOC (for Vereenigde Oost-

Indische Compagnie) or the Seventeen (after its seventeen-strong

board) – became the model for all chartered firms. The VOC's

charter also explicitly told investors that they had limited liability.

Dutch investors were the first to trade their shares at a regular stock

Exchange in 1611…. All the Amsterdam hub needed to prove its

capitalistic credentials was a market crash, which duly arrived with

tulip mania in 1636-1637. (20, emphasis added)

There are several points that must be pointed out explicitly in this discourse: (i) in any
economic system, regardless of its organizational structure, production involves risk taking
(even in a subsistence economy, as noted by game theory); and (ii) once again, there is
a tendency for equating capitalism with "a market crash." A little thought on the matter reveals
that 'risk' applies to all economic systems because it arises out of 'uncertainty'.
This is a well-known relationship since Frank H. Knight published his seminal work, Risk, Uncertainty,
and Profit (1921), but has been ignored in a most irresponsible manner. [For a brief summary
of Frank Knight and his contributions, see: Robert L. Formaini. "Frank H. Knight – Origins of the
Chicago School of Economics," Economic Insights, 7 (3); available at:
www.dallasfed.org/research/ei/ei0203.html.]
'Uncertainty' arises from an inability 'to know' or 'predict', with any degree precision,
the outcome of an event or series of interrelated events as they unfold through time. 'Risk',
on the other hand, is, to some extent or in some manner, "susceptible of measurement." More specifically,
Knight has made the following distinction:

Hence the problem of profit is one way of looking at the problem of the

contrast between perfect competition and actual competition….

… the problem of profit…have arisen from a confusion of ideas which

goes deep down into the foundations of our thinking. The key to the whole

tangle will be found to lie in the notion of risk or uncertainty and the

ambiguities concealed therein…. (19)

But Uncertainty must be taken in a sense radically distinct from the

familiar notion of Risk, from which it has never been precisely

separated. The term 'risk,' as loosely used in everyday speech and in

economic discussion, really covers two things which, functionally at

least, in their causal relations to the phenomena of economic organization,

are categorically different…. The essential fact is that 'risk' means in some

cases a quantity susceptible of measurement, while at other times it is some-

thing distinctly not of this character; and there are far-reaching and crucial

differences in the bearings of the phenomenon depending on which of the

two is really present and operating. There are two other ambiguities in the

term 'risk' as well, which will be pointed out; but this is the most important.

It will appear that a measurable uncertainty, or 'risk' proper, as we shall use

the term, is so far different from an unmeasurable one that it is not in effect

an uncertainty at all. We shall accordingly restrict the term 'uncertainty' to

cases of the non-quantitive (sic) type. It is this 'true' uncertainty, and not risk,

as has been argued, which forms the basis of a valid theory of profit and

accounts for the divergence between actual and theoretical competition.

(19-20)

Much later, Knight demonstrates the 'who-and-why' of the knowledge/risk/uncertainty phenomena:

…changes in conditions give rise to profit by upsetting anticipations and

producing a divergence between costs and selling price, which would

otherwise be equalized by competition If all changes were to take place

in accordance with invariable and universally known laws, they could be

foreseen for and indefinite period in advance of their occurrence, and would

not upset the perfect apportionment of product values among the contributing

agencies, and profit (or loss) would not arise. Hence it is our imperfect

knowledge of the future, a consequence of change, not change as such, which

is crucial for the understanding of our problem…. (198, emphasis added)

…it is unnecessary to perfect, profitless imputation that particular occurrences

be foreseeable, if only all the alternative possibilities are known and the

profitability of the occurrence of each can be accurately ascertained. Even

though the business man could not know in advance the results of individual

ventures, he could operate and base his competitive offers upon accurate

foreknowledge of the future if quantitative knowledge of the probability of

every possible outcome can be had….knowledge is in a sense variable in

degree and that the practical problem may relate to the degree of knowledge

Economic Lysenkoism ?

Via email:

The Financial Crisis and the Systemic Failure of Academic Economics, by David Colander, Hans
Föllmer, Armin Haas, Michael Goldberg, Katarina Juselius, Alan Kirman, and Thomas Lux: [From
the conclusion] ..."We believe that economics has been trapped in a sub-optimal equilibrium
in which much of its research efforts are not directed towards the most prevalent needs of society.
Paradoxically self-reinforcing feedback effects within the profession may have led to the dominance
of a paradigm that has no solid methodological basis and whose empirical performance is, to
say the least, modest. Defining away the most prevalent economic problems of modern economies
and failing to communicate the limitations and assumptions of its popular models, the economics
profession bears some responsibility for the current crisis. It has failed in its duty to society
to provide as much insight as possible into the workings of the economy and in providing warnings
about the tools it created. It has also been reluctant to emphasize the limitations of its analysis.
We believe that the failure to even envisage the current problems of the worldwide financial
system and the inability of standard macro and finance models to provide any insight into ongoing
events make a strong case for a major reorientation in these areas and a reconsideration of
their basic premises."

Our new hero Elizabeth Warren (we had always liked her posts at Credit Slips, and it's to see
her kicking ass and taking names) pointed to a paper "Bullshit
Promises," by Curtis Bridgeman and Karen Sandrik. It looks at the concept of "bullshit" as defined
by philosopher Harry Frankfurt and discusses the implications for contract law.

For those not familiar with Frankfurt's construct, (and I wasn't), bullshit is different than
lying. Lying takes place when an individual says something he knows to be untrue. Bullshit
is when the speaker is indifferent to the truth.Frankfurt's example is when a politician
goes on about how "our great and blessed country....created a new beginning for mankind." The candidate
may or may not believe it, and in this case, he isn't saying it to be believed, he is saying it
to curry favor with voters.

The authors explain:

The defining characteristic of bullshit, for Frankfurt, is that it is speech that holds itself
out as describing reality, but fails to live up to the accepted standards of how we go about
making such descriptions. It is not its actual truth or falsity that determines whether a statement
is bullshit, but rather whether it is made with or without regard for its truth or falsity.

I have a particularly keen interest in topics like this because I am distressed with the many and
varied forms of dishonest that take place routinely in our culture. Not only is there resigned acceptance
of much of it, but even worse, people don't even seem to notice when it happens.

I don't mean
the sort of white lies that will be with us ever and always to smooth over interpersonal relations
(although research has found that they are amazingly common, with study subjects telling 20 to 30
lies a day). It's the skirting the edge of truth in business and public life that sets my teeth
on edge.

Maybe I am just showing myself to be old-fashioned, but when I started out for myself nearly
20 years ago, pretty much everything was on a handshake basis, even though I would always paper
it up. I've seen a decline in those sorts of situations over the years, and my colleagues have had
similar experiences. In recent years, I've had a few situations where people have attempted to retrade
deals radically at the 11th hour, even with a paper trail and authorizations, almost for sport,
just to see what they could get away with.

As an aside, maybe that's why Clint Eastwood remains so popular. He has come to play anachronistic,
cranky (most recently, in Gran Torino, bigoted) old men, who are nevertheless appealing because
they adhere rigidly to antique, unabashedly masculine notions of honor, in particular, living up
to one's word.

I wonder how the decay started. Politicians have always been famous for exaggerating, but Lyndon
Banes Johnson took discourse down a notch (he lied so unabashedly that reporters, historically loath
to say anything bad about a sitting President, started openly about a "credibility gap"). But I
believe that it is commercial speech that has fostered a willingness to cut corners with the truth.

I could go on at length, but I will stop with a couple of examples. One of the mainstays of commercials
is to show smiling, sometimes ecstatic or giddy, people using the product. Is a better cake mix
or floor cleaner really going to make you feel all that good? No, but the images say they will.
And because the distortion/overpromise is non-verbal, it's harder to parse it out and look at it
clinically. That is why TV is so remarkably effective.

Another is the pervasiveness of "gotcha" practices, which are particularly popular in financial
services. Rebates that have such elaborate protocols that it is clear that the company went to some
length to come up with ways to reject completed forms. "Free" checking accounts that are anything
but (say, a minimum balance, or only a few month no-fee period). As we discussed
earlier this evening, revocable "fixed interest rate for the life of the balance" credit card
offers. And then we just have good old fashioned bad faith dealing. I have taken to recording the
dates and details of medical claims I submit to my insurer, Cigna, because they routinely throw
them out. Two years ago, every single item I sent to them wound up in the system. Now, anywhere
from 20% to 35% go missing. But I can't prove that they are systematically and deliberately "losing"
claims, even though that is clearly what they are up to.

Now the list above could all be called lies, made with an intent to deceive. But we have related
bullshit. I once went to a focus group (I do so out of professional curiosity) which was to test
consumer reactions to a proposed advertising message for a health insurance company. I cannot recall
the exact wording, but all the messages said explicitly that the insurer would put the patient's
interest first, be proactive, caring, etc. I took issue, saying the ad themes were rubbish, no insurer
acted that way and they would have to turn their business model on its head to do so (ironically,
the insurer was CIgna).

The person running the session kept trying to force me into agreement: "But if a company were
to do this, how would you feel about it?" The session leader refused to hear that if I saw an advertisement
so wildly at variance with the truth, it would annoy me rather than make we think better of the
company. So we have bullshit market research leading to dishonest ad campaigns.

Back to the paper for some legal highlights:

Most courts require an actual intent to deceive the promisee rather than just a lack of an intention
to perform. A paradigm case would be Max Bialystock from the musical The Producers, who sold
1,000% interest in a musical, planning to make sure the musical was so bad that there would
be no profits to divide so that no one would discover his fraud....

In a world of standard-form
contracts, however, consumers are faced with what is arguably a much more widespread problem
than lying promises. Parties with great bargaining power who deal primarily in standard-form
contracts need not lie in order to get the benefits of lying. Instead, what parties can do –
as we will see, what they often actually do – is to avoid making a lying promise simply by making
more nuanced promises that fall short of committing them to any particular course of conduct.
To be sure, these parties use the words of promising, but then they elsewhere reserve the right
to cancel the contract at any time or to change its terms unilaterally.

The paper then has a very informative discussion of some of the many tricks that credit card companies
play (did you know that it takes PhD level reading skills to parse the interest rate language in
credit card agreements?). Cell phone companies are also devious:

....every major cell phone company has been careful not to commit itself to a particular course
of performance by reserving broad rights for itself in the terms and conditions.61 For example,
Verizon states that the consumer's service is "subject" to its business practices, procedures
and policies, which may be changed at any time without notice.62 Verizon then proceeds to state
that "we can also change prices and any other conditions in this agreement."63 Likewise, AT&T's
has a similar clause: "We many change any terms, conditions, rates, fees, expenses, or charges
regarding your service at any time." Again, like the credit card companies, cell phone companies
are not making outright lies so long as they do not have a plan in place to increase the rates
at the time of advertising the plan. But they are also not subjecting themselves to the norms
of promising even as they use words that would suggest otherwise. While the consumer is committed,
the cellphone company can do what it likes.

While these two industries are arguably the worst offenders, similar bad practices are common elsewhere.

The authors content that the protections under current law against such practices are too weak and
suggest some modest reforms that could rein them in a great deal.

Anonymous:

One of the reasons I think this recession is going to be much worse than most people imagine,
is exactly this culture of bullshit we swim in. You don't notice it until you've crawled up
on land and had time to dry yourself off and think about it.

So, imagine tens of millions
of American consumers, cut off from their credit cards and cable TV brainwashing for several
months by economic necessity, and then being coaxed back into the consumerist fold. This culture
looks horrible from the outside, and once you've been detoxed for a few months, you're an outsider.

I'm stingy, not because I don't enjoy fine things, but because virtually nothing you can
afford to buy in this country lives up to the promises.

The point is it got worse before Nixon, and appears correlated with the popularity
of TV. Weirdly, Johnson and Nixon kept lyin' when the footage from VIetnam made it hard to pretend
things were going well there. So we've now had nearly four decades of pols getting more clever
about handling the media.

And commercials are getting ever more manipulative. I spent two years in Oz, and it was refreshing
how straightforward (and often wry) their commercials are. Ours have very weird video game and
dream type images, often bizarre and not funny irony. It almost seems as if a very disturbed
psyche is behind some of our stuff. And I suspect a lot of research has gone into it and has
ascertained that it is effective.

Anonymous:

The de-evolution of the business contract has been a sore spot of mine for many years now.
In my field, construction, its a game of who sets the standards, manufacturer of building goods,
people with the development monies, right through out the entire food chain.

Ask a question to a person with authority about a clarification in a spec, may educe a response,
but try and get them to sign off on it. I've seen contracts ripped up with the statement of
go a head and do some thing about it we have better solicitors. In the building boom over here,
I have watched as the old and knowledgeable members of the industry have be replaced with increasingly
younger and more malleable individuals with little ethical behaver evident in their still maturing
brains.

Ex sample to my point, Young man walks on to construction site, new khaki slacks, fashionable
new black shoes, Ralph L Oxford shirt and eyes wide with pride. I greet him with a G'Day and
what can I do for you, his response was Hi I'm the new site supervisor (his type would run 5
to 20 jobs depending on size). I jokingly say you guys just keep getting younger every day and
his response was "well we are bringing a new youthful energy into the market". Well after I
picked my jaw off he floor, I wished him luck in his new position and got back to my work. My
head was filled with pictures of him in a room full of dopplegangers, just down loading what
ever some construction/sales Mgr puts in front of them and send them out the door to make life
hell for everyone else and all for a company cell phone/car and a title they can bullshit about
at the pub to get girls and impress mates lool.

Society is sick and its the criminals, wolfs in lambs skins, sales, advertising, profit at
all costs, politicians for personal gain that are the root of it.

Yes Yves, I agree with you 110% fix this component in the equation and then things will start
to function with more rational behaver for everyones benefit.

'Bullshit' has been around for a long long time. It's acknowledged in your Constitution
- that's why the right you have is to 'the pursuit of happiness', not 'happiness'. The hucksters
facilitate that pursuit.

For other literary examples see "Huckleberry Finn" (the Duke and
the King); or Nabokov "Nicolai Gogol" (1944).

The term "poshlost" that Nabokov uses is a nuanced version of 'bullshit'. Fake ad promises
are pretty much at the core of it. You can see Nabokov pursuing that from magazines & film (40s)
through to TV (50s and 60s).

Since the recession is caused by rich people deciding not to work, the solution, of course, is
to cut capital gains taxes to they'll stop lounging around and do something productive:

Laffer-able, Marion
Maneker, BP Cafe: ...Art Laffer ... was on Fast Money... The segment was on the proposed
Obama tax cuts. Laffer didn't think much of them. Instead, he wondered aloud, what if the government
proposed a 6-month income tax moratorium: how great a stimulus would that be? After all, Laffer
reasoned, freeing citizens from the undue burden of taxes would get them all out working harder
and spending money.

Really? Did anyone on the panel believe that Americans of all income levels are sitting
on the couch–or lounging out by the pool–instead of working because they're unhappy with their
income tax? They're knocking off early because the marginal rates are too high and they'd prefer
the leisure time to the minimal extra money? Fascinating. Unemployment moving toward double
digits and the greatest white-collar restructuring in 15 years all because of onerous income
taxes?

Sure, he's a guest on the show–they're being polite, right?–but not one of the traders said
a word about this preposterous idea. They just nodded their heads in agreement and kept the
bobbing up as Laffer launched into his idea that capital gains should not be taxed at all.

The slam against the Obama cuts was that the money would go into the mattress, not stimulate
the economy. ... But why would the wealthy be any different? Cut their income tax or capital
gains and they'll put the money in the mattress right now too.

Not that cutting the capital gains tax would do anything to move money off the sidelines.
Where would it go? What productive use would it be put to?

I'd share the segment with you but there's no clip of his appearance on the CNBC site and
the short post on the segment on Fast Money's page is covered by an intrusive pop up. Maybe
they've finally gotten a sense of shame for promoting this voodoo.

This tries to use a stabilization argument to implement a growth policy, which is a bad idea.
We can debate whether cutting capital gains taxes is a good way to promote economic growth in the
long-run, but it's clear that cutting the capital gains tax is a lousy short-run stimulus program.
Even if it does promote new investment, and again that is a point that can be debated even in good
times, in bad times it's hard to imagine a cut in capital gains motivating new investment when the
economic outlook is so poor and so uncertain. In addition, you run into the same "are the projects
shovel ready" problem you run into with public spending. For the most part, they aren't shovel ready
and planning and constructing new investments, e.g. building a new production line, is not something
that happens overnight. But no matter, the real goal here isn't stabilization anyway, and the long-run
growth arguments are mostly a vehicle for obtaining the real goal: tax cuts for the wealthy. I hope
Democrats don't give into this nonsense as they continue to compromise to get something passed.

Update: In comments to another post, where I agree that some type of tax cut
may be needed as part of the stimulus package, and also say that "I am not thinking of the trickle
down variety,"pgl
says:

Tax cuts for the well to do - who are not borrowing constrained - will likely have NO aggregate
demand stimulus effect as I have often argued (aka either Life Cycle or Ricardian Equivalence)
models so if this is what the Republican Party have in mind - it is based on hogwash economics.
Tax cuts for the working poor, however, may be a good idea as these households will consume
much of the tax cut. I think this is what Obama has in mind. If your argument is
that we should go with the kind of tax cuts Obama campaigned on - I agree. But tax cuts
for Bill Gates is just stupid from a Keynesian point of view.

Update: And speaking of tax cuts of questionable value as a stimulus measure,
Dean Baker:

More Money for Robert Rubin, Beat the Press: It looks like President-elect Obama is picking
up President Clinton's promise to end welfare as we know it. Back in those pre-welfare reform
days, welfare checks went to poor families. Welfare as we know it now seems to involve giving
taxpayer dollars to Citigroup and other banks.

The media seem to have largely overlooked the Citigroup tax credit in their discussion of
the latest items in President Obama's stimulus proposal. According to the
Washington Post, the proposal will allow companies to write off current losses against taxes
paid over the last 4-5 years, not just 2 years, as in current law.

There are relatively few companies that could benefit from this tax break since most companies
will not have losses so large that they would need more than two years of tax payments to balance
them against. But, really big losers, like Robert Rubin's Citigroup, and other badly failing
financial institutions, are losing much more money in 2008 and 2009 than they earned in 2006
and 2007.

Did the political connections of Robert Rubin and others in the financial industry have anything
to do with the decision of Obama's economic team to be so generous to them? I don't have an
answer to that question, but the media should be asking it.

At best, I suppose you could argue this is a backdoor method of recapitalizing struggling financial
institutions, but even then there are better ways to provide for recapitalization.

Scientists across America are celebrating the passing of the Bush administration as the end of
a dark age, a bleak stretch in which research budgets shrank and everything — stem cells, sex education,
climate change, and the very origins of the Grand Canyon — became a point of conflict.

... ... ...

The last time Canada let its research spending slide in the mid-1990s, the country lost so many
scientists it wiped out entire departments.

Heather Munroe-Blum, principal of McGill University in Montreal, was head of research at U of
T during those dark days and saw top academics in field after field pack their bags and head south.

"It was heartbreaking," she said.

The losses spurred the university community to lobby the Liberal government to give them the
money to stem the tide. Those efforts paid off. Between 1997 and 2005, annual federal funding for
university research more than tripled to more than $2.5-billion from $793,000.

The crisis also prompted the government to create programs to bolster the country's research
expertise, such as the Canada Foundation for Innovation, which funds research infrastructure, and
the Canada Research Chairs, which now support 2,000 scholars across the country.

(These programs have since become models of interest to other governments, including the Obama
administration.)

The investments also triggered a building boom as state-of-the-art facilities sprang up in major
cities. Before long, foreign talent followed.

Leah Cowen, an infectious diseases specialist, came to U of T from the Massachusetts Institute
of Technology. Neuroscientist Evelyn Lambe left Yale University. Noted stem cell scientist Gordon
Keller, a returning Canadian, left New York to take the helm at the McEwen Centre for Regenerative
Medicine in Toronto. Dan Goldowitz left an endowed position at the University of Tennessee to become
a Canada Research Chair in developmental neuro-genetics at UBC.

"The biggest reason for me leaving was the Bush administration … they were anti-intellectual,
intolerant and the NIH pay line was plummeting," said Dr. Goldowitz, who arrived in Vancouver in
2007.

"There just seemed to be a bigger commitment at UBC and Canada-wide for research generally."

Dr. Giaever landed a Canada Research Chair in chemical genetics that came with a generous five-year
package to launch her own lab at U of T's sparkling new Terrence Donnelly Centre for Cellular and
Biomolecular Research — a light and airy glass tower that won the 2008 Governor General's Medal
in Architecture.

She calls it a "world-class facility" but said the biggest draw north "were the world-class collaborators."

Her husband received a tenured position through U of T's Banting and Best Department of Medical
Research and both became assistant professors. They had every reason to believe they had picked
the greener pastures. At the CIHR, approvals for grant applications were running in the 20 per cent
range, said Dr. Nislow, just as it once had at the NIH.

But only two years into their arrival here, they have sensed winds of change in Canada's research
climate — and the breezes aren't warm.

"We're seeing top scientists here having trouble getting funding," Dr. Giaever said. "Not funding
renewals tends to have a much greater impact" since it could mean the closing of a lab, people losing
jobs and research stopping in midstream.

"If Obama pumps up science, maybe Canada will follow suit. If not, maybe all these people Canada
attracted might move."

More Piling On Cochrane: Why He Cannot Go Back To Being Taken Seriously Even About Asset Pricing:
Oh, I cannot resist. Since his effort to dump on Keynesians in the WSJ, lots of
people have been piling on John Cochrane, showing that nearly all his claims are not only laughingly
bogus, but seriously unsupported even in his own column, such as failing even to mention a single
supposedly Keynesian economist who forecast a return to recession as a result of budget sequestration,
a centerpiece of his embarrassing column. A sampling can be found Mark Thoma's links for
today at
economistsview,
sort of a Christmas Eve special.

In any case, what caught my attention and is pushing me into the piling on as well is
a remark Brad DeLong made in his post at the link entitled "Cochrane ought to simply say..."
He suggests that Cochrane has made such a big fool of himself out of all this that he should
just go back to working on asset pricing. I am going to argue that even in that arena,
he has made a bit of a fool of himself and should also be ignored to some extent, even though
he has a long and respectable publication record in the area.

So, what is his problem? ...

pgl said...

Cochrane does better at finance (even though Barkley has point) than he doe at macroeconomics.
On the latter - he really is clueless.

pgl -> Darryl FKA Ron...

Yep - Matt not understanding that the Great Recession led to higher transfer payments. We've
asked Matt many times to read E. Cary Brown's 1954 AER paper on how to measure fiscal policy.
Obviously he has not bothered to read that either. Too busy babbling on and on and on and on!

Darryl FKA Ron -> pgl...

Yeah, I know but usually I just scroll on by. It's the correct thing to do. THis comment
on Rosser's article after his too dumb to even be in kindergarten comment yesterday just snagged
my tripwire and set me off.

Darryl FKA Ron said...

"Why He (Cochrane) Cannot Go Back To Being Taken Seriously Even About Asset Pricing"

[You cannot go BACK to where you have never been. OK, someone apparently has taken Cochrane
seriously in the past. Sounds like a personal problem to me.]

pgl said...

Here is the gist of Barkley's post:

"He is one of the leading figures in finance who has simply ignored dealing seriously with
the phenomenon of "fat tails," more properly known as kurtosis (or even as leptokurtosis), which
are widely known to be ubiquitous in many financial time series. This is more a subject for
Nassim Taleb, although he pushes things further to talk about full-blown Keynesian-Knightian
uncertainty that he calls "black swans," arguing that modeling fat tails is a matter of "grey
swans" because we can estimate various probability distributions that show them, and that the
crash of 2008 was obviously coming, whereas true black swan uncertainty involves there being
no probability distribution at all."

pgl said...

Double bonus coverage. Dave Weigel notes that not only has the price of oil been falling
but so has gold and silver prices. So those of you who follow investment advice from Glenn
Beck - you're broke:

'I said that "Mr. Elmendorf's traditional economic views are too mainstream for those conservatives
pining for the good old days of Reagan-era supply-side economics" and called him a "dead man
walking" as far as his CBO position was concerned.'

Elmendorf is a Republican but he is not a Laffer Curve nutcase. We did cut taxes during the
Reagan years. The deficit mushroomed, real interest rates went up substantially, and investment
demand fell as a result. During the Reagan-Bush41 era, real GDP grew by 3% per year as opposed
to the 3.5% growth rate for the 1947-1980 period and the 3.6% rate during the Clinton years.

Supply-side economics is junk science but thanks to the Republicans, the CBO will be just as
plagued with junk science as the JCT currently is.

Cochrane cites George Osborne as an economic expert? Seriously - it was one of the worst opeds
ever. Coppola understands more about the UK economic performance since 2007 than Osborne and
Cochrane combined. But then Osborne is not economist and one has to wonder why anyone would
consider Cochrane to be one as well.

Darryl FKA Ron -> pgl...

"...But then Osborne is not economist and one has to wonder why anyone would consider
Cochrane to be one as well."

Cochrane received his Ph.D. in Economics from the University of California at Berkeley in 1986,
after having obtained a B.S. in Physics from MIT in 1979 and having served as a junior economist
on the Council of Economic Advisers (1984–1985). He was hired by the University of Chicago economics
department in 1986 and moved to the business school in 1993.

Cochrane has served as head of the National Bureau of Economic Research asset pricing group,
and was the editor of the Journal of Political Economy from 1998 to 2003. He was elected Fellow
of the Econometric Society in 2001, served as vice-president of the American Finance Association
in 2008, and was elected president of this learned society for the 2010 term.

[LOOK:

From MIT physics to Berkeley economics during the Reagan years. The University of Chicago economics
department to the business school in 1993. Head of the National Bureau of Economic Research
**asset pricing group.** Vice-president of the American Finance Association in 2008, and was
elected president of this learned society for the 2010 term.

So, what does that all add up to? Seems prepped to work at a major hedge fund or investment
bank or just serve as an academic shill for Wall Street.]

pgl -> Darryl FKA Ron...

An impressive resume. So what the hell happened to him? I guess the allure of supporting
the wishes of rich people warped his brain.

Roger Gathmann -> pgl...

Well, I take that resume more as an x ray of economics as a discipline during the Great Moderation,
when the field's center of gravity shifted towards the far right, and neo-Keynesianism of all
things became the representative of the left. CVs are, after all, documents that represent norms
first, and merit second.

I like to think of the cvs of the major British physicians who, in the seventeenth and eighteenth
century, were worried that British ship captains were copying the continental superstition of
Dutch and Portugese sailors and stocking up on limes to prevent scurvy. This, the British establishment,
well trained in humoral medicine, was useless. Bleeding, work, and vinegar were the ticket to
correct humoral imbalances. David Wooton's excellent book,

"Ships' captains had an effective way of preventing scurvy, but the doctors and the ships' surgeons
persuaded the captains that they did not know what they were doing, and that the doctors and
surgeons (who were quite incapable of preventing scurvy) knew better. Bad knowledge drove out
good. We can actually see this happening. There is no letter from a ship's surgeon to his captain
telling him to leave the lemons on the dock, but we do know that the Admiralty formally asked
the College of Physicians for advice on how to combat scurvy. In 1740 they recommended vinegar,
which is completely ineffectual, but now became standard issue on navy ships. In 1753 Ward's
Drop and Pill also became standard issue."

Standard medical history credits James Lind with being the first one to discover that lemons
and limes prevented scurvy. Unfortunately, as Wooten points out, he soon retracted his advice,
since he decided to treat the fruits in the best chemical fashion by boiling them, which dissipated
the vitamin c, before giving them to scurvy patients. So he relapsed into advising bleeding
and vinegar.
But Lind's CV was excellent. So was that of the physician to the fleet, Sir William Cockburn,
who in his textbook on Sea Diseases in 1736 spotted the true cause of scurvy: laziness! Whether
in economics or medicine, the upper class's intellectuals have always had a sharp eye out of
the essential laziness of the peasants. Sir William advised that the disease could be cured
by making the patient work harder.
I'm sure Sir William died content and believing his own bs completely. And why shouldn't he?
Cochrane, with his excellent CV and his access to the higher media, will never have a reason
to disbelieve his own theories, or the fact that the lower classes are incorrigibly lazy. He'll
no doubt retire content with his work, and be honored by the American economics association
for the huge advances he has made in our knowledge of economics. So it goes.
Incidentally, it is estimated more British sailors died of scurvy in the 18th century than died
in battle. So it goes with the poor tars, too.

Julio -> Roger Gathmann...

They probably had a saying "nobody loses his job by prescribing vinegar".

Darryl FKA Ron -> pgl...

"An impressive resume."

*

[Not my idea of it. I like Roger's take. Cochrane's resume is expressive of his love for the
rentier culture and its artifacts. Likewise it is repressive of any tendency to humanity and
higher moral motives. "Seems prepped to work at a major hedge fund or investment bank or just
serve as an academic shill for Wall Street" is not my idea of impressive.]

When science turns into a sect this is Lysenkoism, plain and simple. Most neoclassical economists
are 100% pure sectants.

I've mentioned this perspective before in my comments, so I am glad Paul has decided to flesh
the matter out a bit.
Economics as entertainment, or entertainment posing as economic discourse, is the logical follow-on
to entertainment as politics, which has been with us for centuries.

Both these notions remind us, painfully so, that the average American cannot be bothered
to properly analyze matters presented to them in the firehose of media that douses them daily.
In fact, they are numbed by the torrents, allowing entertainment to override truths, thereby
becoming even more susceptible to simply accepting fabrications as truths.

Hello George Orwell.

waztec, Seattle 9 hours ago

You make an interesting side point when you say that people who are good at entertainment
might not be good at pouring over records and data. I have always marveled at the attacks from
the right with regard to the liberal nature of academia. The rail and fulminate about the lack
of conservative representation in faculties. Is it possible that it is just a matter of self
sorting? People who are drawn to academic rigor seek the truth, but are lousy at selling snake
oil.

Money doesn't drive them, finding knowledge does. On the other hand, liberals are probably
underrepresented in banking and business. There, acquisition is the goal and the search for
verifiable truth, not so important, unless it generates a profit center. I say all this realizing
that a recent study found that bankers lie frequently. An outlook difference such as this explains
a great deal of what conservatives do when it comes to deriding science, for example. Conservatives
are on Mars and Liberals!

Gregory Pijanowski, Buffalo, NY Yesterday

Entertainers and pundits rarely, as Brad Delong might say, mark their beliefs to market.
Corporate decision makers do in their annual reports. How do economists in the corporate world
still make a living while giving really bad advice? That can be partly answered with how the
pain of a poor decision is dished out in the current corporate culture.

If an economist makes a poor decision, the worst-case scenario is a loss of their job. However,
that person is typically high enough in the company food chain to receive a substantial severance
package plus a quick job offer from another firm using their existing network of contacts in
the industry.

The punishment for the poor advise is transferred down to the operations level by layoffs (with
minimal, if any, severance). Those left behind are rewarded with increased workloads, reduced
benefits, and no pay increases. The really unlucky ones have to endure multiple lectures on
the value of meritocracy.

Why would anyone worry about giving bad advice when its heads I win, tails you lose?

elvislevel, tokyo Yesterday

There is a strong tendency to read evidence until you find the result you want and then stop.
Some are aware of this and try to resist it. Others consider it a useful tool - a way to appear
dispassionate while being a complete hack.

trustfundbabywannabe, Los Angeles Yesterday

This is true about political punditry, too. Read right-wing blogs and pundits, and you see
they live in an imaginary world in which what's true is less important than what might be true,
or could be said to be true, sort of. (It's Colbert's "truthiness.") One quality they all share
is the inability, or indisposition, to read what they've written and, before publishing, ask,
"Okay, but is this really true?" Then again, they're not analysts or journalists or scholars,
but propagandists. So we get what their masters pay for.

big fat ted, usa Yesterday

"It's not cruelty; it's strategy."

Well put.

(But a little extra cruelty on occasion, is OK with me.)

Robert Baesemann, Los Angeles CA Yesterday

Almost fifty years ago, Prof. Jerzy Karcz told me story of how the KGB approached him while
he visited his mother in Poland. Men in dark leather jackets had offered him a substantial sum
to write a report comparing soviet and American agriculture. I asked why he refused, and he
explained that if you take their money for anything, they will blackmail you with the fact that
you dealt with them, regardless of what you did or said. The principle is that the simple fact
of doing business with someone can be held over your head.

When I read about competent economists repeatedly saying foolish incorrect things, I think of
Prof. Karcz and the KGB. For current economists, the deals need not be consulting contracts
or monetary payoffs, they might have been promised high-level government positions, visiting
appointments at think tanks, or a return to the limelight. One cannot be sure, but those economists
seem to have taken the first bite of the apple. After that they appear to be restricted to two
choices: 1.) Toe the party line and continue saying what they are told to say; or 2.) Face up
to the very embarrassing exposure of their agreement to say things for which they had little
or no scientific basis. To their credit, it was easy to jump to conclusions in 2008 or 2009,
but those fairly innocent early bargains gave the puppet masters all of the leverage they need.
Hence their willingness to spend seven years predicting dire outcomes that have never happened.

seeing the obvious, NJ Yesterday

The speakers fees are just another example of affinity fraud. I think most entertainment
experiences of the wolfs of wall street involve costly bottles of wine, recreational drugs and
high priced hookers.

Christopher Neyland, is a trusted commenter Jackson, MS Yesterday

These charlatans have no shame. They are not so ignorant of the truth of history
that their tables tell them things that reality disproves. They manipulate the data on purpose,
and when caught, they go silent for a while and then crawl back from under their rocks to sling
more nonsense to the true believers who cannot be swayed by evidence.

Now, I'm not a psychiatrist, but maybe Dr. Oz can diagnose what is wrong with these people that
they have no capacity for shame.

Well, maybe not Dr. Oz, but perhaps someone who knows what he or she is talking about.

Jason Mason, Walden Pond Yesterday

Since when do propagandists care about facts? Indeed, it their role to convince the rubes
of their "truth" only.

Laffer, for example, enabled Reagan to claim that tax cuts would decrease deficits, if anyone
cares to remember.

gemli, is a trusted commenter Boston Yesterday

All religions, whether they spring from theology, politics, economics, or medicine, work
the same way: charismatic personalities pander to the insecurities of the uninformed in order
to get them to open their hearts and wallets. Only when we think that Dr. Oz is about health,
or that conservative economists are about economics, will we be surprised by their behavior.

mfuchs12, Philadelphia, PA Yesterday

Of course, PK is right about the general case. Dr. Oz is a special situation, though, I think.

Unlike other hucksters, he is actually a talented and respected heart surgeon who still operates
successfully at Columbia Presbyterian, not exactly a schlocky place. I'm sure he reads and contributes
to medical journals in his specialty, and is a true scientist in that sphere.

On the other hand, his wife, Lisa, is a naturalist, alternative medicine advocate and self-styled
expert. And, on the third hand, he has an MBA from Wharton. Why?

I think Dr. Oz is motivated by three things: (1) a genuine, but also grandiose and narcissistic,
desire to reach out and connect with millions of "patients," (2) an extreme case of devotion
to his anti-scientific wife, and (3) an unhealthy attraction to money.

Dan, NJ Yesterday

Naming names s inappropriate here. I once worked with a number of PhD economists in an internal
consulting group in a large firm. Some of the PhDs could reason their ways out of a paper bag,
others were stupider than the proverbial fence post. It is far from clear earning a PhD in economics
requires any intellectual capacity.

On another topic, I've worked for two large firms that had chief economists supported by staffs.
Their economics groups didn't publish newsletters, they published forecasts of a variety of
economic measures to be used in business cases. In both firms business cases that used unofficial
economic forecasts were rejected summarily.

Stephane, Montreal Yesterday

Let me work through the problem using economists as an expample.

While people such Lucas and Cochrane made some rather bogus claims, I wouldn't suggest that
it is out of incompetence. In his critique, Lucas circa 1976 exhibited the very skills we would
expect from a critical thinker. So, it certainly is not out of a binding constraint on his cognitive
ability that he laid out a silly argument against fiscal policy using Ricardian Equivalence.
Besides, his own work is filled with instances where he properly handles summations -- so, again,
it's not because he's short of being able to do it. The same applies to most economists: it
is hard to imagine how someone incapable of abstract thought could earn a PhD and most of their
work profess the very abilities that apparently failed them in specific circumstances.

This directly implies that proper education and skill acquisition might sometimes not be enough.
The diffusion of information does not always suffice to bring about greater understanding, even
when the recipients of this information are capable of using it properly -- Lucas being a prime
example of just that.

However, their mistakes seem to happen only in specific settings. This could be explained by
cognitive biases, attitudes, social norms and values, etc.

theodora30, Charlotte NC 11 hours ago

The first two reasons you give could explain everything. It is entirely possible for a genuinely
nice person to do what Dr. Oz does. I think he is at heart a wishful thinker who wants to believe
these things will help people because he does care and that makes him very seductive. (Either
that or he is a great actor.) Despite his medical training he is a magical thinker. People really
can compartmentalize their minds and be very rational in some areas but use emotion based thinking
in others. Money may be a big motivator but it is not necessary. There are a lot of doctors
and scientists who are very rational in their careers but believe things like miracles really
happen, Jesus rose from the dead, etc.

I think this distinction is important in dealing with these kinds of people. A true believer
needs to be dealt with differently than a snake oil salesman.

I would bet Paul Ryan is a true believer while guys like Karl Rove are admittedly not. Rove
openly uses spinmeisters like Frank Luntz to deliberately mislead people. For example turning
SS and education over to Wall Street profiteers is sold with the market tested term "privatization"
to deliberately mislead the public. It was Rove, apparently, who said that while liberals were
living in the reality based world he and his compatriots created their own reality.

P.M., Summerville, GA Yesterday

The phenomenon of Dr. Oz's influence on American society is duplicated many times in many
different areas. Sean Hannity, Glen Beck, any Kardashian - all distribute nonsense and non-fact
based information.

They are able to do so because somehow they gained a media platform and people began paying
attention to them - and other media outlets give them face time just because they are famous.

sciencehabit writes "A
creationist conference set for a major research campus — Michigan State University (MSU)
in East Lansing — is creating unease among some of the school's students and faculty, which
includes several prominent evolutionary biologists. The event, called the Origins Summit, is
sponsored by Creation Summit, an Oklahoma-based nonprofit Christian group that believes in a
literal interpretation of the Bible and was founded to "challenge evolution and all such theories
predicated on chance." The one-day conference will include eight workshops, according the event's
website, including discussion of how evolutionary theory influenced Adolf Hitler's worldview,
why "the Big Bang is fake," and why "natural selection is NOT evolution." News of the event
caught MSU's scientific community largely by surprise. Creation Summit secured a room at the
university's business school through a student religious group, but the student group did not
learn about the details of the program—or the sometimes provocative talk titles — until later.

Is economics a science or a religion? Its practitioners like to think of it as akin to the former.
The blind faith with which many do so suggests it has become too much like the latter, with potentially
dire consequences for the real people the discipline is intended to help.

The idea of economics as religion harks back to at
least 2001, when economist Robert Nelson published a
book on the subject. Nelson argued that the policy advice economists draw from their theories
is never "value-neutral" but foists their values, dressed up to look like objective science, on
the rest of us.

Take, for example, free trade. In judging its desirability, economists weigh projected costs
and benefits, an approach that superficially seems objective. Yet economists decide what enters
the analysis and what gets ignored. Such things as savings in wages or transport lend themselves
easily to measurement in monetary terms, while others, such as the social disruption of a community,
do not. The mathematical calculations give the analysis a scientific wrapping, even when the content
is just an expression of values.

Similar biases influence policy considerations on everything from labor laws to climate change.
As Nelson put it, "the priesthood of a modern secular religion of economic progress" has pushed
a narrow vision of economic "efficiency," wholly undeterred by a history of disastrous outcomes.

Rational Responses

The economic zeal reached its peak several years back, when a number of economists openly celebrated
what they called economic imperialism -- the notion that the inherent superiority of their way of
thinking would lead it to displace all other social sciences. Academics sought to bring the advanced
calculus of rationality -- with its assumption that everything can be explained by people's perfectly
rational responses to incentives -- to the primitives in fields ranging from sociology to anthropology.

The imperial adventure lost much of its momentum in the wake of the 2008 financial crisis. More
attention has turned to the psychological, or behavioral, revolution, which has established that
the rational ideal of economic theory isn't even a good starting point as a crude caricature of
the way real people act. We're often goal-oriented, of course, but we seek those goals through imperfect
heuristic rules and trial and error, learning as we go. If anything, rationality is the anomaly
in human life.

Of equal significance is a growing acceptance of
Nelson's larger point: that economics is riddled with hidden value judgments that make its advice
far from scientific. In one notable development, the Journal of Economic Perspectives published
a
paper by economists Daron Acemoglu and James Robinson that examines how value judgments -- in
this case, the dismissal of political repercussions -- have undermined well-intentioned economic
interventions.

Most economists, for instance, see the weakening of trade unions in the U.S. and other Western
nations in the past few decades as a good thing, because unions' monopoly power over wages impairs
companies' ability to adapt to the demands of the market. As Acemoglu and Robinson point out, however,
unions do a lot more than influence the supply and cost of labor. In particular, they have historically
played a prominent role in creating and supporting democracy, in limiting the political power of
corporations, and in mitigating income inequality.

Narrow policy analyses have repeatedly led economists
to push for policies that have had unexpected consequences for the balance of political power.
Acemoglu and Robinson cite the push to privatize industries in
Russia in the 1990s. The idea
was that private ownership, no matter how it came about, would ultimately benefit the entire economy.
In practice, a rigged process gave rise to an illegitimate oligarchy and an increase in inequality
that set the stage for the ascendance of President Vladimir Putin's authoritarian regime.

Tragic Flaw

More recently, the gospel of economic efficiency helped lay the groundwork for the financial
crisis, mostly by encouraging overconfidence in the wonders of financial engineering. Theory-induced
dreams of market discipline provided justification for stripping away entirely sensible regulations,
such as barriers between commercial and investment banking, and for avoiding oversight of the booming
trade in derivatives. One result was an extremely wealthy financial lobby that is still working
hard to block reform.

In all these cases, the tragic flaw lies in the heady
confidence that comes with a one-size-fits-all theoretical framework. There's a real danger in seeing
economics as an objective science from which all values have been stripped. Nelson preferred an
older, more modest perspective on economics espoused by Frank Knight, a founder of the University
of Chicago's free-market school of thought. Knight
expressed the view that truly careful social and economic analysis emphasizes the limits to
human knowledge and "the fatuousness of over-sanguine expectations" from economic-policy designs,
including those favoring free enterprise.

In short, economists would do well to derive their prescriptions from observations of how the
world really works, with a healthy respect for its complexity. Faith is no substitute for informed
inquiry.

(Mark Buchanan, a theoretical physicist and the author of "Forecast: What Physics, Meteorology
and the Natural Sciences Can Teach Us About Economics," is a Bloomberg View columnist.)

To contact the writer of this article: Mark Buchanan at buchanan.mark@gmail.com

Freedom and human dignity mark any serious rendering of utopia. Politics
only sets the stage: utopian thinking necessarily privileges the individual
in terms of exploring his desires, expanding his interests, and taking
control over his life. So, for example, Marx never equated communism
with any regime, not even the Paris Commune, but instead with the end
of "pre-history" and a world where "the free development of each is
the condition for the free development of all." In such a world, he
believed, humanity can finally democratically determine its fate in
common, consciously and without reference to external determinants like
economic interest. Perhaps even more important, however, the classless
society must serve as a society in which individualism would flourish.

This vision initially influenced the Bolsheviks who, after all, gained
power in 1917 under the slogan: "All Power to the Soviets!" Left-wing
radicals still exhibit nostalgia for the "heroic stage" of the Russian
Revolution (1918-1921) when it seemed that all things were possible:
the cultural avant-garde working for the people, the abolition of money,
the transformation of the nuclear family, the end of hierarchy, and
international revolution intent upon creating regimes based on soviets
or workers' councils. The arbitrary exercises of power, the bloodshed,
the confusion, the cruelty, and the poverty of those times vanish.

Only an idealized vision remains of what are today completely anachronistic
institutions such as soviets in which, as it was once put to me, "everyone
will control everything" (naturally without considering the number of
meetings this would entail). Many contemporary radicals are inspired
only by the image of that "new man" who once seemed ready to take the
stage. Trotsky crystallized this utopian communist outlook in his
Literature and Revolution (1924) by insisting that ultimately: "Man
will become immeasurably stronger, wiser, and subtler; his body will
become more harmonized, his movements more rhythmic, his voice more
musical. The forms of life will become dynamically dramatic. The average
human type will rise to the heights of an Aristotle, a Goethe, or a
Marx. And above this ridge new peaks will rise."

Utopian experiments undertaken in the past cast a dark shadow
over the seemingly pedestrian politics in the present. According
to this mode of thinking, differences between existing parties and movements
appear negligible. There is only mass society with its culture industry
and commercialism. The drama is gone. The existing ensemble of social
relations turns into a seamless whole threatening all forms of critical
reflection and individuality. The "system" (not class society) is now
seen as the problem and anything tainted by instrumental reason or bureaucracy
is suspect. Grand narratives are considered mere manipulative props
for mass movements, authoritarian parties, and overweening states. Tempering
the imbalances of political and economic power is no longer the priority.
Nothing associated with real politics is radical enough and, in this
way, the perfect becomes an enemy of the good. Staunch belief in
utopian ideals excuses indifference to building a better future. As
an all or nothing proposition, therefore, utopia can justify passivity
as well as fanaticism.

Kievite

"Staunch belief in utopian ideals excuses indifference to building a better future. As
an all or nothing proposition, therefore, utopia can justify passivity as well as fanaticism."

Well said. I think is fanaticism, not passivity is the essence of utopian thinking. The arbitrary
exercises of power, the bloodshed, the confusion, the cruelty, and the poverty naturally follow.

Along with the Authoritarian personality we can probably talk about "True believers" as another
important type of personality, that deserve careful study. When organized this , it is a dangerous
type of personality although in a different way then Authoritarians, or, say, psychopaths.

Of all the Religious Right's schemes, the constant promotion of Bible-based creationism in
schools is one of its most nefarious.

Not only does replacing science with biblical literalism violate the separation of church and
stat irst day they walk into freshman Biology 101.

In fact, a failure to understand evolution can make it harder for high school students to get
into the best colleges. Try passing the Advanced Placement Biology exam when you know nothing of
natural selection. A poor grounding in evolution can choke off entire career paths for young people.

Despite these high stakes, some states, school districts and individual teachers insist on doing
students a disservice by promoting scientific illiteracy.

Anyone who thinks this issue died with the Scopes trial in 1925 hasn't been keeping up. Creationists
have continued to spread ignorance and attempt to infiltrate public education. Examples are legion,
but here are five prominent (and outrageous) attempts by creationists to disrupt the education of
America's budding scholars.

1. Texas: In one of the creationists' sneakiest moves to date, in 2007 a phalanx
of anti-science fundamentalist groups swamped the Texas legislature and lobbied for a law allowing
elective courses "about" the Bible in public schools.

At first glance, it sounded like it might work. The courses were supposed to be objective and
not promote any one version of faith over others. But Texas lawmakers refused to allocate any money
for teacher training, leaving the matter in the hands of local school districts.

You can guess what happened – in most districts, no training was offered. About 60 public school
districts and charter schools adopted the classes, and many of them ended up with instruction that
had the flavor of fundamentalist Sunday School lessons.

A recent report by the Texas Freedom Network authored by Mark Chancey, a professor of religious
studies at Dallas' Southern Methodist University, found that many schools are teaching that the
Earth is 6,000 years old, a key concept of creationism. Chancey found two districts that went so
far as to teach that modern racial diversity can be traced back to Noah's sons, another creationist
standby. Another district used videos from YouTube arguing that people's lifespans began to drop
"due to major environmental changes brought about by [Noah's] flood."

Most of the Bible courses, Chancey reported, were taught from a default conservative Protestant
perspective. Most claimed that the Bible is literally true, and some even included anti-Jewish bias.

Observed Chancey, "Courts have repeatedly ruled that advocating creation science in public school
science courses is unconstitutional….Nonetheless, several courses incorporate pseudoscientific material,
presenting inaccurate information to their students and exposing their districts to the risk of
litigation."

2. Louisiana: In the early 1980s, Louisiana legislators decided to pass a law
mandating that when evolution was taught in public schools, "creation science" must be as well.
Scientists, educators and advocates of church-state separation were appalled and blasted the so-called
"balanced treatment" measure, but lawmakers, led by state Sen. Bill Keith, plowed ahead. The bill
was soon law.

Advocates of the new law didn't even bother to disguise their religious motivations. Keith asserted
that evolution is a tenet of "secular humanism, theological liberalism and atheism." Paul Ellwanger,
a creationist who helped author the bill, said he viewed the struggle as "one between God and anti-God
forces."

A legal challenge was promptly filed, and the case went all the way to the U.S. Supreme Court.
Fundamentalist religious groups bombarded the high court with legal briefs urging the justices to
uphold the law, arguing that it was merely an attempt to promote "academic freedom" and present
both sides of a controversial issue.

But the justices weren't fooled. In a 7-2 ruling in Edwards v. Aguillard, the court
struck down the law. Writing for the majority, Justice William Brennan observed, "Families entrust
public schools with the education of their children, but condition their trust on the understanding
that the classroom will not purposely be used to advance religious views that may conflict with
the private beliefs of the student and his or her family."

Unfortunately, Louisiana learned little from the experience, and legislators there have continued
to pass bills designed to eviscerate the teaching of evolution. Most recently, the legislature in
2008 approved a "Science Education Act" that has little to do with actual science or useful education.
The law allows teachers to use "supplemental" materials – code for creationist propaganda – in science
classes.

Zack Kopplin, a former high school student in Baton Rouge who now attends Rice University, put
it well during a 2011 pro-science rally: "Louisiana," he said, "is addicted to creationism."

But his failure to consistently work his will on Congress surely has less to do with his
individual failings, as Woodward suggests, than with larger forces, chief among them the radicalization
of the GOP — a party that actually seems to believe its depiction of a moderate, pragmatic president
as some kind of wild-eyed collectivist, a party whose members, in their loathing for government,
were willing to risk, in some cases to welcome, the economic armageddon of a debt default as
an opportunity, a catharsis, a shock to the body politic. In Woodward's book, "the caucus" and
the tea party are little more than bit players, but for Obama — and no less for Boehner — their
rigidity is the central, unalterable fact of political life. The manufactured crisis over the
debt ceiling was their proud creation, and their zealotry has extended it right to the edge
of the cliff. Congress is one thing — how does a man work his will on a crusade?

It's important to view Woodward's statements through a "Very Serious" lens that assumes a particular
kind of grand bargain -- one that is tough on social programs for one thing -- is highly desirable.
His idea of good and bad outcomes - e.g. whether standing up for certain principles in a negotiation
is honorable or obstructionist - must be seen in this light.

Mistakes and Ideology in Macroeconomics, by Simon Wren-Lewis: Imagine a Nobel Prize winner
in physics, who in public debate makes elementary errors that would embarrass a good undergraduate.
Now imagine other academic colleagues, from one of the best faculties in the world, making the
same errors. It could not happen. However that is exactly what has happened in macro over the
last few years.

Where is my evidence for such an outlandish claim? Well
here
is Nobel prize winner Robert Lucas

But, if we do build the bridge by taking tax money away from somebody else, and using that
to pay the bridge builder -- the guys who work on the bridge -- then it's just a wash.
It has no first-starter effect. There's no reason to expect any stimulation.
And, in some sense, there's nothing to apply a multiplier to. (Laughs.) You
apply a multiplier to the bridge builders, then you've got to apply the same multiplier
with a minus sign to the people you taxed to build the bridge.

And
here is John Cochrane, also a professor at Chicago, and someone who has made important
academic contributions to macroeconomic thinking.

Before we spend a trillion dollars or so, it's important to understand how it's
supposed to work. Spending supported by taxes pretty obviously won't work: If
the government taxes A by $1 and gives the money to B, B can spend $1 more. But A spends
$1 less and we are not collectively any better off.

Both make the same simple error. If you spend X at time t to build a bridge, aggregate demand
increases by X at time t. If you raise taxes by X at time t, consumers will smooth this effect
over time, so their spending at time t will fall by much less than X. Put the two together and
aggregate demand rises.

But surely very clever people cannot make simple errors of this kind? Perhaps there is some
way to re-interpret such statements so that they make sense. ,,. Brad deLong tries very hard
along these lines (see
here for example), but just throws up inconsistencies.

I prefer to just note that if any undergraduate or graduate student in the UK wrote this
in an exam, they would lose marks. The more interesting question for me is why the errors were
made. ...

I want to suggest two answers. The first is familiarity with models. I cannot imagine anyone
who teaches New Keynesian economics, or who talked to people who teach New Keynesian economics,
making this mistake. This is because, in these models, we do have to worry about aggregate demand.
We focus on consumption smoothing, and Ricardian Equivalence... I often tell my first year undergraduate
students that if they write anything like 'Ricardian Equivalence says fiscal stimulus will never
work', they are in danger of failing. ...

Lack of familiarity with New Keynesian economics may be partly explained by the history of
macroeconomic thought that I briefly noted in an earlier
post. As New Keynesian theory is an 'add-on' to the basic Ramsey/RBC model, it is possible
to teach macro without getting round to teaching New Keynesian theory. However, what many people
find difficult to understand is how monetary policy (or at least monetary policy as seen by
pretty much every central bank) could be regarded as an optional add-on in macroeconomics.

The second difference between physics and macro that could lead to more mistakes in the latter
is ideology. When you are arguing out of ideological conviction, there is a danger that rhetoric
will trump rigour. In the next paragraph Cochrane writes

These ideas changed because Keynesian economics was a failure in practice, and not just
in theory. Keynes left Britain 30 years of miserable growth. Richard Nixon said, "We are
all Keynesians now," just as Keynesian policy led to the inflation and economic dislocation
of the 1970s--unexpected by Keynesians but dramatically foretold by Milton Friedman's 1968
AEA address. Keynes disdained investment, where we now all realize that saving and investment
are vital to long-run growth. Keynes did not think at all about the incentives effects of
taxes. He favored planning, and wrote before Hayek reminded us how modern economies cannot
function without price signals. Fiscal stimulus advocates are hanging on to
a last little timber from a sunken boat of ideas, ideas that everyone including they abandoned,
and from hard experience. ...

Let's not worry about where the idea that Keynes disdained investment comes from, or any
of the other questionable statements here. This is just polemic: Keynes=fiscal expansion=planning=macroeconomic
failure. It is guilt by association. What on earth does fiscal expansion have to do with
planning? Well, they are both undertaken by the state.

I have argued
elsewhere that the problem too many macroeconomists have with fiscal stimulus lies not in
opposing schools of thought, or the validity of particular theories, or the size of particular
parameters, but instead with the fact that it represents intervention by the state designed
to improve the working of the market economy. They have an ideological problem with countercyclical
fiscal policy. But the central bank is part of the state, and it intervenes to improve how the
economy works, so this ideological view would also mean that you played down the role of monetary
policy in macroeconomics. So ideology may also help explain a lack of familiarity with the models
central banks use to think about monetary policy. In short, an ideological view that distorts
economic thinking can lead to mistakes.

I need to think about this more before signing onto or rejecting this argument, but here is Chris
Dillow's response to the post above this one (and it provides a nice complement to the post that
follows by Dan Little):

He suggests two good answers. I'd like to suggest a third. There are two different ways of
thinking about economics - the model paradigm and the mechanism paradigm, and the former has
crowded out the latter.

Simon says:

If you spend X at time t to build a bridge, aggregate demand increases by X at time t.
If you raise taxes by X at time t, consumers will smooth this effect over time, so their
spending at time t will fall by much less than X. Put the two together and aggregate demand
rises.

This is clear and true. And it would be obvious to anyone using the mechanism paradigm. If
you ask "What is the mechanism whereby higher taxes reduce consumer spending?" you pretty much
walk into the notion of consumption smoothing. ...

But lots of brilliant economists don't think merely in terms of mechanisms but rather build
impressive models. And like photographers, they tend to fall in love with their models which
distracts them both from others' models and from mechanisms.

This matters, because the importance of particular mechanisms varies from time to time. The
social sciences, wrote Jon Elster:

can isolate tendencies, propensities and mechanisms and show that they have implications
for behaviour that are often surprising and counter-intuitive. What they are more rarely
able to do is state necessary and sufficient conditions under which the various mechanisms
are switched on. This is [a] reason for emphasizing mechanisms rather than laws. Laws by
their nature are general…Mechanisms by contrast make no claim to generality. (Nuts
and bolts for the social sciences, p 9-10)

A good example of this lies in the idea of expansionary fiscal contraction. The virtue of
this idea is that it draws our attention to mechanisms (a falling exchange rate, better corporate
animal spirits, whatever) whereby fiscal contraction might boost the economy. The drawback is
that these mechanisms are just
unlikely to operate here and now. Yes, there's a model that tells us that expansionary fiscal
contraction can work. And there are models that say it can't. But arguing about competing models
misses the practical point.

Now, there is an obvious reply to all this. Models have the virtue of ensuring internal consistency,
and thus avoiding potentially misleading partial analysis. However, I'm not sure whether this
is an argument against mechanisms so much as against poor thinking about them.

When I was a student (back in the 80s!) I learned lots of models (OK, a few), but when I
became a practising economist, I found them to be less useful in thinking about the economy
than Elsterian thinking about mechanisms.

This is not to dismiss models entirely. I'm just saying that, insofar as they have uses other
than as mental gymnastics for torturing students, it is because of the mechanisms contained
within them. The parts might be more useful than the sum.

Dan Little discusses how the definition of a scientific explanation has changed over time:

Recent thinking about scientific explanation, by Dan Little: What do we want from a scientific
explanation? Is there a single answer to this question, or is the field of explanation fundamentally
heterogeneous, perhaps by discipline or by research community? Do biologists explain outcomes
differently from physicists or sociologists? Is a good explanation within the Anglo-American
traditions of science also a good explanation in the German or Chinese research communities?
Is the idea of a scientific explanation paradigm-dependent?

For several decades in the twentieth century there was a dominant answer to this question,
that was an outgrowth of the tradition of logical positivism and examples from the natural sciences.
This theory of explanation focused on the idea of subsumption of an event or regularity under
a higher-level set of laws. The deductive-nomological theory of explanation specified that an
outcome is explained when we have produced a deductively valid argument with premises that include
at least one general law and that lead to a description of the event as conclusion. Carl Hempel
was the most prominent advocate for this theory (Aspects
of Scientific Explanation),
but it was widely accepted throughout the philosophy of science in the 1950s and 1960s. The
"covering law" model was a core dogma for the philosophy of science for several decades.

The D-N theory was subject to many kinds of criticisms, including the obvious point that
much explanation involves phenomena that are probabilistic rather than deterministic. Hempel
introduced the inductive version of the D-N model to cover probabilistic-statistical explanation,
along these lines. An argument provides a scientific explanation of E if it provides at least
one probabilistic law and a set of background conditions such that, given the law and conditions,
E is highly probable. This model was described as the "Inductive-Statistical" model (I-S model).
Wesley Salmon's
Scientific Explanation and the Causal Structure of the World
falls within this tradition but offers important refinements, including his formal definition
of causal relevance.

In each case the motivation for the theory of explanation is a plausible one: we explain
an event when we show how it was necessary [or highly probable] in the circumstances, given
existing conditions and relevant laws of nature. On the logical positivist approach, an explanation
is an answer to a "why necessary" question: why did this event occur? In this conception of
explanation the idea of necessity or probability is replaced with the idea of deductive or inductive
derivability -- a syntactic relationship among sets of sentences.

A different approach to explanation turns to the idea of causation. We provide an explanation
of an event or pattern when we succeed in identifying the causal conditions and events that
brought it about. This approach can be tied to the D-N approach, if we believe that all causal
relations are the manifestation of strict or probabilistic causal regularities. But not all
D-N explanations are causal, and not all causal explanations invoke regularities. Derivability
is no longer the criterion of explanatory success, and explanation is no longer primarily a
syntactic relation between sets of sentences. Instead, substantive theories of causal powers
and properties are the foundation of scientific explanation. A leading exponent of this view
is Rom Harré in Harré and Madden,
Causal Powers: Theory of Natural Necessity.
Nancy Cartwright's
Nature's Capacities and Their Measurements
is also an important contribution to this view. And J. L. Mackie's
The Cement of the Universe: A Study of Causation
is an important contribution as well. The causal approach retains the idea that explanation
involves showing why an event is necessary or probable, but it turns from derivability from
statements of laws of nature, to theories of causal powers and properties.

The causal mechanisms approach to explanation continues the insight that explanations involve
demonstrating why an event occurred; but this approach moves even farther away from the idea
of a causal law, replacing it with the idea of a discrete causal mechanism. On this approach,
we explain an event when we identify a series of causal interactions that lead from some antecedent
condition to the outcome of interest. Hedstrom and Swedborg's
Social Mechanisms: An Analytical Approach to Social Theory
presents aspects of this theory of explanation in application to the social sciences. One benefit
of the social mechanisms approach is that it also provides a basis for answering "how possible"
questions: if our puzzlement is that an outcome has occurred that seems inherently unlikely,
we can provide an account of a set of causal mechanisms that transpired to bring it about.

The chief line of dispute in the traditions mentioned so far is between the "general laws"
camp and the "causal powers" camp. Both are committed to the idea that explanation involves
showing how an outcome fits into the ways the world works; but the general laws approach presumes
that law-like regularities are fundamental, whereas the causal approach presumes that causal
powers and mechanisms are fundamental.

So what has developed in the theory of explanation in the past twenty years? Quite a bit.
A recent collection of essays coming largely from the Scandinavian tradition of the philosophy
of science is quite helpful in orienting readers to recent developments. This is Johannes Persson
and Petri Ylikoski's 2007
Rethinking Explanation.
Quite a number of the contributions are worth reading carefully. But Jan Faye's "Pragmatic-Rhetorical
Theory of Explanation" is a good place to start. Faye distinguishes among three basic approaches
to the theory of explanation: formal-logical, ontological, and pragmatic. The formal-logical
approach is essentially the H-D and I-S approaches described above. The ontological approach
is the causal-powers approach described above. The pragmatic approach is in a sense the most
important recent contribution to the theory of explanation, and represents a significant re-focusing
of the debates in post-empiricist philosophy of science. Here is how Faye describes the pragmatic
approach to explanation-theory:

The pragmatic view sees scientific explanations to be basically similar to explanations
in everyday life. It regards every explanation as an appropriate answer to an explanation-seeking
question, emphasising that the context of the discourse, including the explainer's interest
and background knowledge, determines the appropriate answer.

And why should we consider a pragmatic approach? Faye offers eight reasons:

First, we have to recognise that even within the natural sciences there exist many different
types of accounts, which scientists regard as explanatory.

Second, if one is looking for
a prescriptive treatment of explanation, I see no reason why the social sciences and the
humanities should be excluded from such a prescription. If they are included, the prescriptive
account must include intentional and interpretive explanations, i.e., accounts providing
information about either motives or meanings.

Third, the meaning of a why-question alone does not determine whether the answer is relevant
or not.

Fourth, John Searle has correctly argued that the meaning of every indicative sentence
is context-dependent. He does not deny that many sentences have literal meaning, which is
traditionally seen as the semantic content a sentence has independently of any context.

Fifth, many explanations take the form of stories. Arthur Danto has argued that what
we want to explain is always a change of some sort. When a change occurs, we have one situation
before and another situation after, and the explanation is what connects these two situations.
This is the story.

Sixth, a change always takes place in a complex causal field of circumstances each of which
is necessary for its occurrence. Writers like P.W. Bridgman, Norwood Russell Hanson, John
Mackie, and Bas van Fraassen have all correctly argued that events are enmeshed in a causal
network and that it is the salient factors mentioned in an explanation that constitute the
causes of that events.

Seventh, the level of explanation depends also on our interest
of communication. In science an appropriate nomic or causal account can be given on the
basis of different explanatory levels, and which of these levels one selects as informative
depends very much on the rhetorical purposes.

Eight, scientific theories are empirically underdetermined by data. It is always possible
to develop competing theories that explain things differently and, therefore, it is impossible
to set up a crucial experiment that shows which of these theories that yields the correct
account of the data available.

Faye then goes on to analyze scientific explanation as a speech act. We need to understand
the presuppositions and purposes that the explainer and the listener have, before we can say
much about how the explanation works.

Petri Ylikoski's contribution to the volume, "The Idea of Contrastive Explanandum," picks
up on one particular but pervasively important feature of the rhetorical situation of explanation,
the idea of contrast. When we ask for an explanation of an outcome, often we are not asking
simply why it occurred, but rather why it occurred instead of something else. And the contrastive
condition is crucial. If we ask "why did the Prussian army win the Franco-Prussian War?", the
answer we give will be very different depending on whether we understand the question as:

"Why did the Prussian army [rather than the French army] win the Franco-Prussian War?"

or:

"Why did the Prussian army win [rather than fighting to stalemate] the Franco-Prussian War?"

So scientific explanation is context-dependent in at least this important respect: we need
to understand what the question-asker has in mind before we can provide an adequate explanation
from his/her point of view. As Henrik Hallsten puts it in his contribution, "What to Ask of
an Explanation-Theory",

To summarize: Any explanation-theory must [do] justice to the distinction between objective
explanatory relevance and context dependent explanatory relevance or provide good arguments
as to why this distinction should not be upheld. (16)

So perhaps the most important recent developments in the theory of scientific explanation
fall in a few categories. First, there has been substantial work on refining the idea of causal
explanation (link).
Second, philosophers have reinforced the idea that explanation has pragmatic and rhetorical
aspects that cannot be put aside in favor of syntactic and substantive features of explanation.
And third, there is more recognition and acceptance of the idea that explanatory models and
standards may reasonably differ across disciplines and research areas. In particular, the social
and historical sciences are entitled to offer explanatory frameworks that are well adapted to
the particular kinds of why and how questions that are posed in these fields. In each case the
philosophy of science has made a very great deal of progress since the state of the debates
about explanation that transpired in the 1960s.

"Sensationalism of any type detracts from credibility and distracts from sober appreciation of the
important issues, of the real risks, and of the need for transparency and accountability — not just
in the case of nuclear power, but in all matters of public policy."

A check of the EPA website reveals that they have NOT pulled those 8 monitors, as this article
claims. Indeed, I was able to pull up data from the one in San Jose with a click of my mouse.

Rather, the 8 monitors are being reviewed, to understand the readings, for example, whether
the change is due to a change in the local environment. This sort of review is essential if
we are to trust their accuracy.

This is also part of the reasoning behind having so many of them.

There are a few around the country (7 by my informal count)
which are out of service, out of 124 total.

This is very different than what was reported.

On the other hand, I compared what Ann Coulter said, and
Lawrence Solomon wrote, to what the scientists wrote — and I can see why you might suspect a
concerted propaganda campaign, although you actually present no evidence. I can present no evidence
there is not, and their behavior is certainly consistent with such a campaign!

The scientists were searching for whether there's
threshold below which radiation damage is no longer linear. Understanding this is part of fundamentally
understanding how radiation affects us, and assessing radiation risks, not just from nuclear
plants, but from granite countertops in your kitchen.

What they found is a little surprising, and needs to be
verified by further experiments. They found that the cancer rate was slightly less at the lowest
exposures than in the controls. This could be true, for example, if cancer cells are more susceptible
to radiation than normal cells — it could be both causing and curing cancer. (I'm not saying
that's the explanation — I'm just illustrating how complex phenomena can interact, especially
when dealing with small numbers).

What these "journalists" have done, is take an odd quirk
in a scientific finding, and, entirely on their own, turned it into a "plutonium is good for
you" argument.

The scientists did not make this argument. THEIR conclusion
was, that this suggests that, if a threshold exists, it probably exists in the range of 15-40
cGy. This is over the lifetime (the plutonium stays in place), so we're talking about total
exposure, equivalent to a few chest CT scans.

But if there is a threshold, inhaling even tiny amounts
of plutonium clearly puts you closer to that threshold — and somebody working in a dusty environment
might be exposed to far more. Nobody with a shred of responsibility or credibility is arguing
that plutonium is good for you.

Clearly, Ann Coulter and Lawrence Solomon have both shed
any remnants of credibility and responsibility they may have had.

Personally, I think the conspiracy here is to sell
advertising. There's a lot of past precedent in inflated headlines to draw readers to
news outlets. Even CBS has recently succumbed, shouting that "pools of plutonium" have been
discovered outside the reactors — as opposed to the reality — traces slightly above the expected
background (from atmospheric testing). Even the article didn't make that claim — it was
invented by the editor who wrote the headline.

So please don't become a "media shill" yourself, and lump
the government scientists in with those pushing sensationalism.

Sensationalism of any type detracts from credibility
and distracts from sober appreciation of the important issues, of the real risks, and of the
need for transparency and accountability — not just in the case of nuclear power, but in all
matters of public policy.

The facts as they stand are scary enough. The prospect
of 9 billion people on this planet, all of them demanding energy and food, should give us real
pause. Every war fought is a disaster — many far larger than this one. Natural disasters
that would have gone unnoticed, will strain already overburdened food supplies, or displace
thousands crammed into dangerous locations, simply because they have to live somewhere.

If we're going to address the world's present and future
problems, we need to address the risks we face honestly, and as accurately as we can.

David:

Well said, Bob.
Fear seems to be a prevalent, underlying response to much of what gets written at this site.
Sensationalism sells more than common sense.

dearieme :

The idea that radiation must damage you, however low its
level, is not based on data – it was just an assumption made long ago before there were data.
The idea that plutonium is especially scary is rather babyish – it's nasty stuff, all right,
but not because of its radioactivity. It's not out of line with other radioisotopes – the problem
is a chemical one: it's toxic. And like all toxins, 'the poison is in the dose'.

The problem with plutonium is not chemical. Radioactivity is mutagenic/carcinogenic via alpha/beta/gamma
particle ionizing interaction with the body, which is not the same as chemical ionization process.
Several Plutonium isotopes have long half lives as alpha emitters, which generally have less
penetrability than beta and gamma particles. However if inhaled or ingested they
have a greater chance of altering a cell than beta or gamma radiation would, as they have slower
speed, more mass and energy and thus more chance of absorbtion/interaction with cell structures.

The problem faced by radiation protection officials is that reactors create a massive cocktail
of radionuclides with widely differing characteristics and different biochemistry. Some concentrate
in muscle, some in bone, teeth and DNA, some in lymph nodes. Some don't concentrate anywhere.
Some cause localised damage, others don't. Radioactivity is like poison – there are many different
kinds and they operate by myriad biological mechanisms. Accurate modelling of the biological
effects of either radioactivity or poison involves understanding the specific variations, but
that makes regulation very complex.

For convenience in the 1940s and early '50s nuclear officials decided to treat the
energy of the radioactive decays from all kinds of radionuclide as if they were a uniformly
distributed dose. Then they quantified the expected disease, dose for dose, by reference
to studies of the Japanese survivors of Hiroshima. These people in fact were exposed to a uniformly
distributed dose – the flash of the bomb itself – and the effects of unevenly distributed internal
radioactivity were excluded from the study by the clever trick of comparing the "exposed" bomb
survivors with "unexposed" people ("controls") who lived in the city but had been shielded when
the bomb exploded. Thus the controls and the study group had equal amounts of radioactive fallout
inside them.

Justin:

I do think the reactor disaster is a huge concern, primarily for Japan.

However, you have a number of misstatements and conflations in your blog posts. For example,
there are quite a few isotopes other that Cs-137 that have been created via manmade nuclear
reaction whose halflife is short enough not to be naturally occurring in significant quantities.
so it is not unique in that regard.

Background radiation is one effective relative measurement despite differences in isotopes,
because the exposure pathway result is the same: direct exposure to external radiation.

So while you do say that the problem is more complex than just relative radiation levels,
that's not new information.

There is a field of study already that models all risks from environmental radioactivity
releases: radiation risk exposure analysis. It takes into account initial and residual release,
dispersion patterns, composition and concentrations of radionuclides, environmental transport
pathways, exposure pathways, and generates statistical distributions of both short term and
total effective doses.

ResRad is freely available to download if one would like to do their own model, however
quite a few international scientific organizations are already doing so.

I think it's difficult for most people to know exactly what to worry about with the reactor
disaster and what to do, so I applaud people for getting informed. However, like medical knowledge,
a little can be more dangerous than none at all in that it can allow emotion to change our estimation
of the real risks.

Chris Rogers:

SteveA, I trust my posting have made clear one does not make light of the Fukushima nuclear
crisis – by using the term 'crisis' I suggest one has conveyed how dangerous the situation is,
and hopefully, dare I say it, the plant operator has the incident under some meaningful control.

What has annoyed me from day one of the 'crisis' is the outrageous media reporting of this
crisis, the scare mongering and absolute crass behaviour of those 1000's of miles away
from Fukushima that borders on madness – a madness inspired by the poor reporting of the facts,
little knowledge of scientific jargon used and a clear lack of emphasis on the 20,000 deaths
attributable to a rather large tsunami.

Rather than 'down play' the incident, most reasoned posters quite rightly have stated that
this is a nuclear disaster, one of the worst on record and obviously, many dangers exist and
will continue to exists.

Will this disaster lead to a huge loss of life though, my understanding from reading the
UNCLEAR report on Chernobyl, is that unlike that disaster, the impact on human's will
be limited and a greater danger exists due to panic, rather than various radioactive elements
being emitted from the damaged plant.

Lets be clear, generating power from nuclear energy sources is always going to be dangerous
and such dangers are taken into account when building these large infrastructures.

In all seriousness, we should all be glad that the plant survived the earthquake intact and
that we don't face another Chernobyl catastrophe.

As a reasoned observer, obviously one questions why a nuclear facility is built in a earthquake
zone region, why necessary precautions were not taken against a tsunami – I'm referring here
to the fact that whilst the plant had a sea wall defence, engineers forgot what would happen
if it was breached.

Now, the true cause of this disaster/crisis was a loss of electricity to power cooling
– combine this with the fact that the diesel generators were at ground level or in basements,
suggests a huge engineering blunder was made, one I trust the Japanese will learn from.

So, we have a real crisis, one that currently seems under control, but a crisis nonetheless.

Does this mean living close to Japan I should panic, obviously not – I note the Korean's
have not acted like headless chickens – I wish I could make this claim for many in the USA,
unfortunately, following crass reporting standards, many citizens have behaved like headless
chickens and purchased large amounts of iodine and bottled water – had they lived in Korea I
could understand, that they live more than 5,000 miles away from Fukushima, one questions their
sanity – to put it bluntly, those poor desperate fools who supported the Tea Party are
the same fools running around like headless chickens who share one brain cell between them.

Thank god I'm British, I note my Embassy is open in Tokyo, which best sums it up – there
is little to fear apart from fear itself, yes, we have a crisis, but as stated all along, not
a crisis comparable with Chernobyl – hence, the health risks, that's the real ones are less.
Risks still exist nonetheless, whether these will result in any deaths is questionable as the
UNCLEAR report I keep mentioning makes clear – a link can be found in one of my other posts
for this.

Mooney's critique has understandably annoyed some of his colleagues. In a review in The Washington
Post, the journalist Keay Davidson faults Mooney for not acknowledging how hard it can be to distinguish
good science from bad. Philosophers call this the "demarcation problem." Demarcation can indeed
be difficult, especially if all the scientists involved are trying in good faith to get at the truth,
and Mooney does occasionally imply that demarcation consists simply of checking scientists' party
affiliations. But in many of the cases that he examines, demarcation is easy, because one side has
an a priori commitment to something other than the truth - God or money, to put it bluntly.

Conservative complaints about federally financed "junk science" may ultimately prove self-fulfilling.
Government scientists - and those who receive federal funds - may toe the party line to avoid being
punished like the whistleblower Andy Eller (who was rehired last June after he sued for wrongful
termination). Increasingly, competent scientists will avoid public service, degrading the quality
of advice to policy makers and the public still further. Together, these trends threaten "not just
our public health and the environment," Mooney warns, "but the very integrity of American democracy,
which relies heavily on scientific and technical expertise to function." If this assessment sounds
one-sided, so is the reality that it describes

Who Cooked
the Planet?, by Paul Krugman, Commentary, NY Times: Never say that the gods lack a sense
of humor. I bet they're still chuckling on Olympus over the decision to make the first half
of 2010 — the year in which all hope of action to limit climate change died — the hottest such
stretch on record. ...

So why didn't climate-change legislation get through the Senate? Let's talk first about what
didn't cause the failure, because there have been many attempts to blame the wrong people.

First of all, we didn't fail to act because of legitimate doubts about the science. Every piece
of valid evidence ... points to a continuing, and quite possibly accelerating, rise in global
temperatures.

Nor is this evidence tainted by scientific misbehavior. You've probably heard about the accusations
leveled against climate researchers —... "Climategate," and so on. What you may not have heard,
because it has received much less publicity, is that every one of these supposed scandals was
eventually unmasked as a fraud concocted by opponents of climate action...

Did reasonable concerns about the economic impact of climate legislation block action? No. ...
All serious estimates suggest that we could phase in limits on greenhouse gas emissions with
at most a small impact on the economy's growth rate.

So it wasn't the science, the scientists, or the economics that killed action on climate change.
What was it?

The answer is, the usual suspects: greed and cowardice.

If you want to understand opposition to climate action, follow the money. The economy as a whole
wouldn't be significantly hurt if we put a price on carbon, but certain industries — above all,
the coal and oil industries — would. And those industries have mounted a huge disinformation
campaign to protect their bottom lines.

Look at the scientists who question the consensus on climate change; look at the organizations
pushing fake scandals; look at the think tanks claiming that any effort to limit emissions would
cripple the economy. Again and again, you'll find that they're on the receiving end of a pipeline
of funding that starts with big energy companies, like Exxon Mobil, which has spent tens of
millions of dollars promoting climate-change denial, or Koch Industries, which has been sponsoring
anti-environmental organizations for two decades.

Or look at the politicians who have been most vociferously opposed to climate action. Where
do they get much of their campaign money? You already know the answer.

By itself, however, greed wouldn't have triumphed. It needed the aid of cowardice — above all,
the cowardice of politicians who know how big a threat global warming poses, who supported action
in the past, but who deserted their posts at the crucial moment.

There are a number of such climate cowards, but let me single out one in particular: Senator
John McCain.

There was a time when Mr. McCain was considered a friend of the environment. Back in 2003 he
burnished his maverick image by co-sponsoring legislation that would have created a cap-and-trade
system for greenhouse gas emissions. He reaffirmed support for such a system during his presidential
campaign, and things might look very different now if he had continued to back climate action
once his opponent was in the White House. But he didn't — and it's hard to see his switch as
anything other than the act of a man willing to sacrifice his principles, and humanity's future,
for the sake of a few years added to his political career.

Alas, Mr. McCain wasn't alone; and there will be no climate bill. Greed, aided by cowardice,
has triumphed. And the whole world will pay the price.

BBC News

The head of the American Association of Professors has accused BP of trying to "buy" the best
scientists and academics to help its defence against litigation after the Gulf of Mexico oil spill.

"This is really one huge corporation trying to buy faculty silence in a comprehensive way," said
Cary Nelson.

BP faces more than 300 lawsuits so far.

In a statement, BP says it has hired more than a dozen national and local scientists "with expertise
in the resources of the Gulf of Mexico".

The BBC has obtained a
copy
of a contract offered to scientists by BP. It says that scientists cannot publish the research
they do for BP or speak about the data for at least three years, or until the government gives the
final approval to the company's restoration plan for the whole of the Gulf.

It also states scientists may perform research for other agencies as long as it does not conflict
with the work they are doing for BP.

And it adds that scientists must take instructions from lawyers offering the contracts and other
in-house counsel at BP.

Bob Shipp, the head of marine sciences at the University of South Alabama, was one of the scientists
approached by BP's lawyers.

They didn't just want him, they wanted his whole department.

"They contacted me and said we would like to have your department interact to develop the best
restoration plan possible after this oil spill," he said.

"We laid the ground rules - that any research we did, we would have to take total control of
the data, transparency and the freedom to make those data available to other scientists and subject
to peer review. They left and we never heard back from them."

What Mr Nelson is concerned about is BP's control over scientific research.

"Our ability to evaluate the disaster and write public policy and make decisions about it as
a country can be impacted by the silence of the research scientists who are looking at conditions,"
he said.

"It's hugely destructive. I mean at some level, this is really BP versus the people of the United
States."

In its statement, BP says it "does not place restrictions on academics speaking about scientific
data".

'Powerful economic interests'

But New Orleans environmental lawyer Joel Waltzer looked over the contract and said BP's statement
did not match up.

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